There’s no denying the newspaper business is struggling – especially on the print side – but the proverbial newspaper boy is, surprisingly, doing just fine.
Take Long Beach-based ACI Last Mile Network, for example. The company, which began as a newspaper delivery service more than 50 years ago and has grown its annual revenue to more than $100 million from $20 million in the last five years, closed a deal last week to acquire Willowbrook-based competitor CIPS Marketing Group.
ACI Chief Executive Keith Somers said the deal was part of an expansion strategy that has the company continuing to do newspaper and advertising package delivery, but with a new focus on last-mile parcel delivery.
“We’re re-purposing our delivery network for the future,” Somers said. “And the future of our business is the delivery of all things last-mile.”
Somers declined to give a purchase price for CIPS, which was jointly owned by the Los Angeles Times and Denver-based Digital First Media, owner of the Los Angeles Daily News and a roster of other daily newspapers throughout Southern California. He said the deal was significant for ACI and bolstered the company’s market position – particularly in the advertising packages sector.
“CIPS has been a competitor for about 30 years, and it’s been owned by two very important customers of ours since 2000,” Somers said. “So (the acquisition) shores up our position and consolidates our business and helps us serve our customers more effectively.”
ACI services newspapers that include the Orange County Register, Miami Herald, Atlanta Journal-Constitution, San Diego Union-Tribune and several others in addition to the Times.
Last-mile delivery service has been a fast-growing industry in recent years as customers demand quicker – and cheaper – options for items purchased online from retailers, according to Brody Buhler, the global managing director of consulting firm Accenture’s post and parcel industry group.
“Where consumers used to be OK with three- to-five-day delivery, next-day delivery with no premium charge is the standard now and same-day delivery is becoming more and more prevalent,” Buhler said. “Retailers need something local and fast – it’s not about transporting something from Baltimore to Los Angeles, but from North L.A. to South L.A.”
Buhler said venture capital investment into last-mile solutions has exploded in the last three years, jumping to nearly $2.8 billion last year from $266 million in 2013 – an increase of 953 percent.
Much of that money is being poured into new startups, according to Buhler, but Somers said ACI’s business and relationships with independent contractors around the nation have given the company an opportunity to step in as well.
“We’ve become a national parcel broker,” Somers said. “Legacy print distribution services like us deliver every day, and we’re there first thing in the morning when no one else is.”
Greenberg Glusker Fields Claman & Machtinger served as legal counsel to ACI and FocalPoint Partners acted as a financial adviser.
Representatives of neither the Los Angeles Times nor Digital First immediately responded to requests for comment. The Times is a subsidiary of Chicago’s tronc Inc.
YogaWorks Cancels IPO
YogaWorks Inc. has scrapped plans for an initial public offering this week.
The company had priced its IPO last week at between $12 and $14 a share with plans to go public on the Nasdaq on Thursday.
Those plans evidently went awry.
The Culver City-based company said through a spokesman that the IPO was called off due to market conditions, but no clarification was given as to what those market conditions were.
YogaWorks filed paperwork with the Securities and Exchange Commission late last month declaring its intention to go public. The company filed an updated document last week pricing the offering of 5 million shares with an additional 750,000 available to underwriters.
The offering would have pulled in more than $80 million for the company at the high end of the estimated IPO price range.
YogaWorks had 2016 revenue of more than $55 million, up from $48.5 million in 2015, according to the SEC registration. However, YogaWorks lost $9.5 million in 2016 compared to a $9.2 million loss in 2015.
The company is owned by Great Hill Partners, a Boston-based private equity firm, which purchased YogaWorks in 2014 for $45.6 million.
Busy Q2 for j2
J2 Global Inc., led by Chief Executive Hemi Zucker, closed five deals in the second quarter of 2017 including acquisitions of three international companies.
The Hollywood based internet services provider, which offers cloud solutions and content production, purchased Australia’s CloudRecover, WeCloud of Sweden, Denmark’s Simitu, as well as MyPhoneFax of Washington state, which operates Fax87 and Onlinefaxes.com.
J2 also sold Cambridge BioMarketing,
a carve-out of its Everyday Health Inc.
subsidiary.
