KKR, DLJ in $2.2bn publishing deal

The two private equity firms have combined three companies – Jostens, Von Hoffman and Arcade to form a platform for specialty publishing and marketing services.

Kohlberg Kravis Roberts and DLJ Merchant Banking Partners have joined on the creation of a specialty printing and marketing company in a transaction valued at $2.2 billion (€1.8 billion).

The new company combines DLJ Merchant Banking portfolio company Jostens with two new KKR acquisitions – Von Hoffmann, a publisher of educational textbooks; and Arcade Marketing, a printer of sampling products for the fragrance and cosmetics industry, according to a press release.

Jostens makes yearbooks, class rings and educational commemorative products. It was acquired by DLJ Merchant Banking last year from Investcorp and MidOcean Partners for $1.2 billion. Investcorp had originally purchased the company in 1999 for $826 million.

The deal announced today involves the merging of Von Hoffmann and Arcade with Jostens, which will then be recapitalised, according to the press release. The combined business generated revenues of more than $1.4 billion in the year ended March 31.

The new platform will be led by Marc Reisch, a publishing veteran and KKR senior advisor. He currently serves as chairman of KKR’s highly successful portfolio company, Canada’s Yellow Pages Group. Previously, Reisch was chairman and CEO of the North American division of Quebecor World, a major commercial printer.

Post-closing, KKR and DLJ Merchant Banking, the private equity division of Credit Suisse First Boston, will each own 45 percent of the company. Management will own the remaining equity.

The press release noted that Reisch had been working with KKR ‘over the past several years to find the right opportunity’ within the sector. Alexander Navab, a KKR partner, led the deal for the firm.

In the statement, Reisch said: “We believe there is tremendous opportunity to build a specialty printing and marketing services company that takes advantage of significant cost benefits from combined scale, but that is focused on both organic and acquisition growth.