Spike in gardening fascination spurred MasterTag sale

Facing a surge in desire for its products and solutions more than the final couple of years, Rick Hughes noticed a need to have to drastically expand his organization.

Hughes’ Montague-centered MasterTag Inc. solely provides the horticulture field with printed labels and tags for plants. As a lot more persons took to their gardens all through the COVID-19 pandemic, income at greenhouse and dwelling and garden centers rose, which spelled substantial demand for tags.

“If you could just take a tour of our factory, anyone type of suggests, ‘Wow, how are you putting out so a lot in this room?’ It is really for the reason that we’re crawling above each and every other,” stated Hughes, a fourth-generation proprietor of MasterTag because 1978.



Major executives: Rick Hughes (president/operator) Jennifer Dyer (government director – human sources, I.T., routine maintenance and excellent) Julie Rice (government director – functions) Randi Trygstad (govt director – income and marketing and advertising)

Overall Michigan employees:
140 entire-time workers added assist to satisfy seasonal wants

Business description: Montague-based mostly company of custom made tags and labels for the horticulture field. Labels and tags are applied for both of those educational and advertising purposes.

Advisers on the deal: Charter Funds Partners (financial) and Varnum LLP (legal)

Hughes, who has been instrumental in increasing the geography and product line of a organization that at first begun in 1949 by marketing fishing bobbers, understood that the small business was on the cusp of extra enlargement. Some of the additional urgent wants include things like supplemental manufacturing space, automation know-how to streamline various spots of manufacturing, and new technological know-how to assistance the enterprise continue to be on the cutting-edge of tag and label building.

“When you appear at it, which is all over $10 million to $20 million of investment decision when I’m at this age in all probability, which isn’t the most prudent thing to do,” claimed Hughes, who is 65.

That realization led to the the latest sale of MasterTag to California-based mostly Avery Products and solutions Corp., which specializes in custom-made printing and label earning. Avery Solutions is a subsidiary of Toronto-based mostly company CCL Industries Inc., a global provider of specialty packaging and label producing.

Each sides closed on the deal on Dec. 31, 2021, and phrases of the offer were not disclosed. Hughes discussed that he is remaining with the business through the transition interval as the firm seeks a new president.

The sale of MasterTag was also picked as the production deal of the calendar year for MiBiz’s 2022 M&A Bargains & Dealmakers Awards.

Avery Products and solutions was a acquainted title even in advance of the sale of the business. Hughes explained that Avery Products and solutions and CCL had been eyeing MasterTag for very some time.

“They had identified as like each calendar year for a amount of a long time,” he explained. “I just never answered the connect with. I took the name down, but I just was not in posture to promote.”

The name popped back on the radar when Hughes and the MasterTag group labored with Grand Rapids-centered financial commitment banking company Charter Money Associates to obtain a acceptable customer for the firm with robust roots in Montague. The two functions labored to slender down a checklist of potential buyers to close to a half dozen.

Hughes conceded that he could have gotten more money for the company had he long gone with a distinctive buyer, but the fingers-off method to investing and rising area of interest printers by Avery Items and CCL was anything that spoke to him.

“They mainly start off by saying they’ll under no circumstances know as significantly about — in our situation, the horticulture industry — as we do. Which is accurate,” Hughes explained. “They attempted pretty tough to learn a great deal. But they say, ‘We really do not want to run your company. We’re listed here to make investments in it and assist you mature and aid that with not just money but resources, technologies and facts sharing.’”

“That’s a pretty impressive mixture, primarily for a guy that wants to retain his enterprise in Montague,” he additional.

The Avery/CCL combination has sought out acquisitions of other niche printers. Around the exact time it purchased MasterTag, it also obtained Tampa, Fla.-based Lodging Accessibility Methods LLC, a privately held corporation that specializes in digitally printed and encoded RFID vital playing cards, wristbands and key fobs for entry manage.

“A ton of strategic acquirers will completely integrate the business and processes. Avery does it fully distinct,” stated Mark Streekstra, controlling director at Constitution Money Associates, who served as adviser on the deal.

“For a household enterprise in a little city, that is a big offer. Hearing that and viewing how considerably target was set on the people today and the society by Avery at the really starting was a very fantastic sign of things to occur and in the long run finished up going through with the acquisition. So much, they’ve retained their word. It is a truly good end result so significantly.”

Hughes claimed the way the pandemic roped a lot more men and women into gardening — notably millennials — was the cause for a surge in demand from customers and for creating the great time to sell.

“Sales have been sturdy — if just about anything, we have been a bit capacity restrained,” he stated. “So our market place was surely very good and the acquisition market has sort of rebounded from the preliminary COVID shock. … We understood multiples ended up in a very great selection.”

Even so, just as the pandemic skewed the marketplace in MasterTag’s favor, it also worried off some prospective customers that had been doubtful irrespective of whether the new tendencies on need experienced any being electric power.

“That’s definitely a threat, and some people didn’t even want to arrive to the desk because they did not consider it was sustainable,” Hughes claimed. “And no one actually is familiar with.”

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