Transcontinental Direct Buys Jetson, Doubles CapacityTranscontinental Direct USA purchased Jetson Direct Mail Inc. for $85 million in a bid to become the largest-capacity provider of direct mail services in North America.
The acquisition effectively doubles the company's mail production capacity from 2.5 billion pieces annually to 5 billion. In an interview with DM News yesterday, Transcontinental Direct president Don McKenzie said the combination of his company and JDM, both in the top six of direct mail providers, should make Transcontinental Direct the largest by volume in the direct mail sector.
Located in Hamburg, PA, JDM is about an hour from Transcontinental Direct's Philadelphia headquarters and printing facilities, McKenzie said. JDM generates $91 million in annual revenue and has 1,100 employees with 500,000 square feet of production space.
The move is partly in response to a trend among clients of the print industry who want to reduce their vendor pool and deal more with a one-stop provider, McKenzie said. Large-volume mailers look to large providers for better pricing and mailing as well as a reduced supply chain.
"The old days of working with 50 vendors are gone," he said.
JDM has five facilities in Pennsylvania, including a printing plant and direct mail letter shop plant in Hamburg and three satellite direct mail plants in Reading, Orwigsburg and Frackville. The facilities will be retained and added to Transcontinental Direct USA's eight plants in Philadelphia, Dallas/Fort Worth and Los Angeles. JDM's management team and employees also will be retained, McKenzie said.
The acquisition adds two new capabilities to Transcontinental Direct's Philadelphia operations: ink-jet technology for personalization and a commingling operation that is under construction and scheduled for completion in April.
The acquisition also could boost Transcontinental Direct's client base. JDM's top five clients are not among Transcontinental Direct's top 20, so little overlap exists between the two companies, McKenzie said.
Transcontinental, the Montreal-based parent company of Transcontinental Direct, has been building its direct mail capacities since it purchased U.S. direct marketing services firm CC3 in December 2003. Since then, CC3 has gone through two name changes, finally settling on Transcontinental Direct USA in October 2004.
The expansion continued in 2004 as Transcontinental Direct began work on a new plant in Fort Worth, TX, grew its Philadelphia operations and installed the Kodak Versamark VX5000 Printing System and three Goss presses.
In January 2005, it entered an agreement with PSI Group Inc., a Pitney Bowes company, to provide commingling services for its clients.
In 2000, CC3 was a $60 million company, McKenzie said. Today, as part of the Transcontinental family and with the addition of JDM, it is a $250 million operation.
Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters