Published in Finance

Blackford Capital sells Dickinson Press in first exit for Michigan Prosperity Fund

BY Sunday, November 11, 2018 08:13pm

GRAND RAPIDS — Even when it first acquired Dickinson Press LLC more than three years ago, Blackford Capital saw Brainerd, Minn.-based CJK Group Inc. as a potential buyer.

As Blackford Capital sought to grow Grand Rapids-based Dickinson Press, “we bumped up against each other,” said Martin Stein, the founder and managing director of the private equity firm that’s also based in Grand Rapids. 

Martin Stein COURTESY PHOTO

“We always expected there would be a dialogue with them at some point, and they were a very viable buyer for us to sell capacity,” Stein said of CJK Group.

That expectation eventually came true when Blackford Capital approached CJK Group earlier this year about “opportunities for multiple different areas in which we could partner together.” The conversations for some kind of partnership turned into an acquisition with CJK Group wanting to buy the assets from Blackford Capital. The two closed on the deal in early October.

CJK Group, with multiple divisions, was significantly larger than Dickinson Press. As such, Blackford Capital “felt it was in our investors’ best interests and Dickinson’s best interests to exit to CJK,” Stein said. A consolidating printing industry requires constant investment in technology and M&A to remain competitive, and “you had to grow very, very rapidly in order to be competitive,” Stein said.

“An opportunity presented itself and we chose not to say ‘no,’” Stein said. “There was a great buyer that made a lot of sense.”

Dickinson Press employed about 120 people when Blackford Capital acquired it in July 2015. Today, the company employs 165 people. CJK Group now operates Dickinson Press and Church Hill, Tenn.-based Kingsport Book LLC — an add-on acquisition Blackford Capital made in 2017 that was part of the sale — as Sheridan Publishing Grand Rapids and Sheridan Specialty Binding, respectively.

Sheridan Publishing Grand Rapids provides printing services that includes lithographic and digital printing, perfect and case binding, plus warehousing and fulfillment services. 

The CJK Group also has a book-printing operation in Chelsea, Mich., about 15 miles west of Ann Arbor.

In a statement, CJK Group CEO Chris Kurtzman said the lightweight paper printing capabilities in Grand Rapids and the specialty finishing at the Tennessee facility “expands the service offerings within our portfolio of companies and for CJK Group customers.”

Terms of the deal were undisclosed. Stein declined to discuss the return on the investment, other than to note “our investors were pleased with the outcome” and that Blackford Capital was “delighted by how everything went.”

At the same time, a Blackford affiliate also sold the Dickinson Press plant at 5100 33rd St. SE in Cascade Charter Township to an affiliate of CJK for $2.8 million, according to property records. 

The Dickinson Press sale was the first exit for Blackford Capital’s Michigan Prosperity Fund and came sooner than the five to seven years the private equity firm typically holds companies. However, Blackford Capital has held portfolio companies for as short as 11 months and as long as a decade, Stein said.

“We represented a chapter of the company’s history and I think its legacy will go on to continue,” he said. “Do we have a business that’s in a stronger position now than it was when we acquired it, and will the business continue to grow in Michigan? One of the big features here is that CJK Group is committed to the growth and trajectory of Dickinson.”

Formed in 2012, Blackford Capital’s Michigan Prosperity Fund focuses on investments in the state, and continues to own eight portfolio companies. The fund has deployed roughly $50 million in capital, plus another $20 million through co-investments from partnering investors. 

The fund has nearly reached its maximum capital deployment, according to Stein.

“We will have additional funds in the future,” he said.

Blackford Capital has about $215 million in assets under management. The firm also operates a national private equity fund that owns four portfolio companies.

The National Growth Practice most recently acquired Tustin, Calif.-based Hall Research, a designer and producer of professional audio/visual systems. The investment included co-investor Gun Lake Investments, the economic development arm of the Match-e-be-nash-she-wish Band of Pottawatomi Indians, or Gun Lake Tribe.

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