Cenveo Returns to its Roots – July 2022 M&A Activity

Good Times in the Envelope Business

In what appears to be a positive end to a long and tortuous road, the management team of Cenveo has completed a management buyout of the company. The Burton family, which has effectively controlled the company since 2005, is now collectively the majority shareholder, with the balance of the equity owned by other senior executives.

Cenveo, which started as an envelope manufacturer over one hundred years ago, and at one time seemed bent on acquiring anything but envelope manufacturers, has now been pared back down to its core. What remains is an envelope printing and converting powerhouse. According to the press release announcing the management buyout, “Cenveo is now exclusively an envelope focused business and the largest envelope converter in North America.”

The management buyout transaction may be an example of brilliant strategic planning, or simply good luck getting the timing just right. The envelope business has gone from being a highly price-sensitive commodity business to become a critical component in the print-centric direct mail and transactional document supply chain. For those readers of The Target Report who are not intimately familiar with the printing business, let’s just say that printers and mailers have been scrambling to obtain sufficient quantities of envelopes to complete customer orders. With the ongoing paper shortage (see Paper Industry in Transition – May 2022), converters have resorted to filling orders with brown paper stocks that are more difficult to convert into envelopes and tougher for direct mail printers to process, in lieu of normally widely available standard white paper.

The supply-demand curve has inverted, envelopes are in demand and in short supply. Presumably, this has been good for envelope manufacturers, at least until the market comes back into balance. Cenveo is, finally, in a good spot.