Late Friday afternoon we learned that Clover Imaging Group (CIG) was acquired by Norwest Equity Partners (NEP). This represents the latest in a series of major acquisitions announced in 2019.
With this announcement, it turns out the rumors we were hearing at the Sharp dealer meeting in October were kind of true if you subscribe to the six degrees of separation theory. The rumor circulating was that CIG was on the verge of being acquired by Marco. That rumor was dispelled by Steve Gau, president of Marco’s Copier Division when I met with him at the meeting.
But the reality was a deal was indeed brewing, just not the one erroneously circulated at Sharp’s dealer meeting. The news announced on Friday revealed that Clover Imaging Group and Norwest Equity Partners have entered into an agreement with 4L Holdings Group to acquire the Clover Imaging business unit. According to the press release, the transaction was approved by 4L Holdings’ lenders. Going back to six degrees of separation, Marco is owned by NEP.
Once the transaction closes, which is expected to occur by the end of the year, Clover Imaging will operate as a separate and independent entity from 4L Holdings Group. Clover Imaging’s management team, including Jim Cerkleski, Chairman; George Milton, CEO; and Eric Martin, president; will continue to lead the business, which will remain headquartered in the Chicago area. Financial terms of the transaction were not disclosed.
CIG and NEP Comments
Jim Cerkleski, chairman of Clover Imaging Group and Tim DeVries, NEP managing partner, commented on the agreement in the press release.
“Clover’s executive leadership team, in partnership with NEP, will once again control the destiny of the company we built — demonstrating our unwavering commitment to the success of the business and our shared confidence in the aftermarket imaging supplies industry and consumers’ demand for environmentally conscious products like ours. Under our new, very low debt structure, we have a lot of flexibility moving forward and are well-positioned to write the next chapter for Clover Imaging Group. We could not be more excited about the growth opportunities this new capital and partnership will provide,” said Jim Cerkleski, chairman of Clover Imaging Group.
Tim DeVries, NEP managing partner, stated, “We are excited about our investment partnership with Clover Imaging Group — it is a well-run business with a highly experienced, nimble management team that knows how to innovate and execute. We look forward to collaborating with them to leverage the company’s strong position in the marketplace and put our capital and resources to work to further expand and grow the business.”
What’s next?
It’s no secret that CIG had not been growing on the supplies side of the business at the rate it had been four years ago. We all know that printed output continues to decline. But still, NEP sees an opportunity with CIG. No stranger to acquisitions, CIG can be credited with doing its part to consolidate the third-party supplies industry through acquisition. As reported previously, its most recent acquisition was the assets of LMI Solutions. With the infusion of capital from NEP, there may be additional acquisitions. Just look at Marco’s expanding footprint via acquisition.
With CIG and Marco now both all in the NEP family, we could see an interesting dynamic develop in terms of distribution. Still, it’s too soon to tell for sure, but not too early to speculate.
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