Case Studies - Northwest Mailing Service
| Marketing Industry
Tom Ragen (Ragen), with assistance from Blackmore Partners (Blackmore) and equity backing from Kirtland Capital Partners (Kirtland), acquired the leading direct mail business, Northwest Mailing Service, Inc. The platform functioned as a springboard for strategic add-on acquisitions. As liaison between Ragen and Kirtland Capital, Blackmore was able to construct a beneficial deal package for both parties. The transaction entailed Kirtland investing $28 million in order for Ragen to acquire Northwest plus additional add-ons.
The deal process began when Ragen approached Blackmore with the objective to purchase a company. Ragan managed a start-up company with $150 million P&L and generated 14x revenue growth through the acquisition of a $30 million printing company. As a six sigma champion, Ragen accomplished 13% EBITDA by implementing lean manufacturing for a $250 million business unit with an annualized cost of $1 million as a COO of one of the top label printers in North America. With 10 plus years of experience within the industry, Ragen was poised to acquire a niche service provider and implement his proprietary strategy. Realizing the potential, Blackmore quickly began counseling Ragen through our proven process.
Blackmore's top priorities were to coach Ragen through the processes of devising a comprehensive business plan and identifying potential target companies. Concurrently, Blackmore searched their company's database, consisting of over 8,000 private equity firms worldwide number of firms, to find the right matches for the deal. Blackmore advised Ragen to identify 13 acquisition targets. With a strong management team equipped with an established strategic plan, Blackmore was well-positioned to present the deal to private equity firms.
Blackmore's team of analysts contacted over 30 private equity firms to propose the deal. Numerous firms expressed interest due Ragan's level of experience. Blackmore coordinated meetings between Ragen and interested firms, arranged site-visits to targets, and assisted in the due diligence process. Kirtland Capital took immediate interest in the deal creating a relationship with the executive. Blackmore promptly began negotiating deal conditions with Kirtland Capital. Ragen stated, "The entire Blackmore team has been willing to have the difficult discussions needed and provided me with the support and professionalism that is required for moving into the world of private equity."
Kirtland Capital Partners targets experienced executives in niche manufacturing, distribution and business service companies. Investments focus on the growth of middle-market companies with $25 to $250 million in total revenue. As a relationship-oriented private equity firm, Kirtland values the strong partnerships created with its operating management teams.
Together, Ragen and Kirtland identified Northwest Mailing Service from 13 target companies. Through this 18 month process, Blackmore acted as the intermediary between the two parties. After final negotiations, Blackmore achieved the best possible deal for both Kirtland and Ragen. Kirtland provided $28 in equity backing and acquire Northwest Mailers.
One year after the transaction, Northwest Mailing Service has seen rapid revenue growth; specifically from their broad range of marketing, mailing and distribution services. Over the 50 years of operations, the company has developed innovative marketing capabilities. Centered on data management, northwest has become an experts in marketing consultation, design, lettershop, printing and distribution needs. Recently the company invested in a variety of new, digital technologies in order to create two new services; "New Media 360O" and "Rx Health Advantage." Northwest's 360O program offers innovative cross media marketing and thus building the connection between company and consumer. Rx Health advantage allows Norwest to create pharmaceutical patient kits. Dubbed "the most powerful patient kits in the pharmaceutical marketplace," these kits combine the prescription drugs with the "added value" of relevant consumer coupons and samples. Approved in over 51 therapeutic categories, over 90% of physicians use the program; providing the patients with coupons and samples from only healthy and relevant consumer brands.
With the help of Blackmore Partners and Kirtland Capital Partners, Tom Ragen has grown Northwest Mailing Service to one of the nation's leading direct marketing service providers. Ragen explains, "…Blackmore Partners truly embrace the word partner. They have been an honest, forthright, hard working partner on my behalf. The entire Blackmore team has been willing to have the difficult discussions needed and provided me with the support and professionalism that is required for moving into the world of private equity. I would not have undertaken a project of this scope without the partnership that we formed."