Case Studies | Mail-Well
Mail-Well (currently named Cenveo)
Englewood, Colorado
One of the largest envelope manufacturers in the
U.S., producing a broad line of customized, conventional, and specialty
envelopes and packaging products.
| Investment date: | February 1994 |
| Transaction value: | $165 million |
| Sterling team: | Frank Hevrdejs, John Hawkins, Hunter Nelson |
Background
Owned by Georgia-Pacific Corporation, Mail-Well was producing 13 billion
envelopes in 18 manufacturing facilities in 1993, generating revenue of
about $240 million. Like many of Sterling's portfolio companies, Mail-Well
was a non-core division of a large corporation and presented many opportunities
for value improvement.
Sterling Impact
Sterling immediately forged a partnership with Mail-Well management. For the first time ever,
management and employees owned stock and held options in their company.
This helped develop an entrepreneurial culture, creating incentives to take
advantage of the many opportunities for value improvement and growth.
In the first 18 months, Sterling and management moved toward a major industry consolidation, acquiring American Envelope, Supremex, and Graphic Art Center. These acquisitions broadened the company's geographic presence and product lines, expanded operations into Canada, and diversified operations into the higher-growth printing market. Additionally, emphasis was placed on creating a stand-alone corporate culture, improving economies of paper purchasing, and rationalizing overhead.
Outcome
Under Sterling's ownership, Mail-Well grew to become one of the largest envelope
manufacturers in the U.S. The company completed an IPO in 1995 at 3.4x Sterling's
investment. Subsequent stock trading levels increased ROI to over 15x.
| Revenue growth | $500 million |
| EBITDA improvement | 200% |
| Add-on acquisitions | 3 |
| Sterling return on investment | 3.4x* |