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Donnelley Grabs OfficeTiger by Tail

4/2/06

Giant Chicago-based printer RR Donnelley has announced its pending purchase of BPO player OfficeTiger for about $250 million in cash. The deal follows by about a year Donnelly’s purchase of another outsourcer, Astron, for $990 million, also in cash.

Ever the active buyer and seller, Donnelley has in the last several years sold off an integrated marketing services company, a consolidator and mailer of small parcels, and a warehouse package ID business while buying eight printers, most of them based outside the US.

The OfficeTiger deal therefore represents a new direction in Donnelley’s continuing quest to improve on the commodity printing margins bedeviling the American market. OfficeTiger is a leader in the next generation of outsourcers, those focused on the needs of specific industries rather than on horizontal functions like customer service.

In OfficeTiger’s case, the verticals of choice are investment banks, law firms, graphics houses, retailers and consultancies. The firm adds further value by using its own Western executives to manage the outsourced functions (pre-press, transaction processing, research, etc.) on behalf of clients.

Astron’s BPO model has a more traditional horizontal focus, digging deep into document outsourcing, and is therefore closer to Donnelley’s core printing competency.

In fact, for Donnelley, OfficeTiger is a test of sorts: can the new parent accommodate a business model that differs substantially from the skills demanded by printing on paper?


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