Earlier this week, global private investment firm Platinum Equity agreed to purchase labelling company the Multi-Color Corporation. Compelo Packaging's Thomas Parker takes a look at the firm's 103-year history
Since being set-up in the early part of the 20th century, Multi-Color Corporation has been a giant of the labelling world, with the firm working with well-known brands like Coca-Cola and Wrigley’s.
Now the 103-year-old company is preparing to enter a new era after agreeing a deal to be bought by global investment business Platinum Equity for $2.5bn (£1.8bn).
Beverly Hills-based Platinum Equity, whose founder and chairman Tom Gores has a net worth of $4.1bn (£3.1bn), has $13bn (£9.8bn) in assets under management.
Its investments include the likes of blood sugar testing app OneTouch and sprinkler company Orbit Irrigation, as well as WS Packaging Group.
The Multi-Color Corporation deal, announced this week, is subject to shareholder approval, with the sale expected to take place in the third quarter of this year.
Here, we take a look at the history of a company with more awards to its name than any other labelling firm.
History of Multi-Color Corporation
The Multi-Color Corporation started in 1916 as part of the Franklin Development Company, mainly focusing its attention on the investment of printing technology.
The company’s management was impressed by the innovation so much that it formed a separate company called Printing Machinery Co, before changing its name to MultiColorType.
In its early days, the business focused most of its attention on the printing press, before deciding to put more emphasis on the printing of labels in 1918.
The firm’s foray into this industry started with great success, working with iconic brands such as the Campbell Soup Company as well as Wrigley’s chewing gum.
It expanded its customer base throughout the next 30 years, but increasing demand from businesses meant that Multi-Color had to keep up with technological innovation.
A significant development hit the market during the 1950s, with the creation of rotogravure printing, a technology that the firm would use throughout the rest of the 20th century.
Rotogravure printing helps to develop labels by using stencils to transfer ink on to a product in the shape of a logo.
When Multi-Color entered the 1980s, it became a company that was not just purely focused on keeping up with the latest trends but also creating pioneering technologies of its own, developing the in-mould label.
This is a system whereby the label itself is moulded into the material.
Despite a tricky financial patch during the 1990s, which included the company failing to record any income in 1994, Multi-Color continues to be a major player in its field.
Such is the firm’s size that, in 2017, it purchased Austrian flexible packaging manufacturer Constantia Flexibles‘ labels division for a reported $1.3bn (£976m).
Why does Platinum Equity want to buy Multi-Color Corporation?
After Platinum Equity agreed to buy Multi-Color Corporation, partner Louis Samson said: “We have tremendous respect for the business.
“We believe that its capabilities and established position in the industry, when combined with our portfolio company WS Packaging Group’s operational expertise and financial resources, will enable Multi-Color Corporation and WS Packaging Group to strengthen the value proposition for their customers.
“With a shared vision to deliver the highest quality label solutions to the world’s most prominent brands, we are excited at the prospect of leveraging our resources to pursue new avenues for growth.”
Multi-Color Corporation executive chairman Nigel Vinescombe said: “This transaction is the culmination of our board’s review of strategic alternatives to maximise value for our shareholders.
“As a result of this process, our board, with assistance of independent advisors, unanimously determined that this all-cash transaction will deliver immediate, significant and certain value to our shareholders and is in the best interest of our shareholders and our company.”