Banta Corporation

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Banta Corporation

225 Main Street
Box 8003
Menasha, Wisconsin 54952-8003
U.S.A.
(414) 751-7777
Fax: (414) 751-7790

Public Company
Incorporated: 1901
Employees: 4,900
Sales: $811 million
Stock Exchanges: NASDAQ
SICs: 2732 Book Printing; 2759 Commercial Printing, Not
Elsewhere Classified; 2672 Coated & Laminated Paper,
Not Elsewhere Classified

Banta Corporation, one of the nation’s largest graphic arts and printing companies, literally started in a small-town Wisconsin dining room in 1886. From its humble beginnings, Banta grew to become a technologically-advanced, multi-faceted reproducer of a wide variety of information, from small-run periodicals to popular educational games like “Trivial Pursuit” to CD-ROMs and on-line documentation. By the mid-1990s, Banta had acquired a diverse array of printing and graphics companies, reported sales of $811 million, and was poised for expansion into overseas markets.

In the 1880s, company founder George Banta was a traveling agent for Phoenix Fire Insurance, based in Menasha, Wisconsin, some 80 miles north of Milwaukee. Banta was also a printing buff and, much to the distress of his new bride, Nellie, he brought a printing press into the only room in their house big enough to accommodate it. Two years, one house, and one baby later, Nellie Banta insisted on evicting the press to a shed built in the backyard. George bought a noisy gasoline engine to run the press and also hired one full-time worker for the tiny operation whose main business consisted of printing his insurance forms.

After a fire in 1901 burned down the shed, Banta moved his equipment to a Main Street store front, added a platen job press, and incorporated the business as George Banta Printing Company, with the purpose of “engaging in the business of job and newspaper printing, bookbinding, and manufacture of books and pamphlets.” Two years later the corporation was renamed George Banta Publishing Company. The strain of running the shop along with his insurance job took its toll on George Banta, who had a history of malaria and lung problems. In 1904 his doctors ordered him west to recuperate. To save their business, Nellie decided to stay behind in Menasha and took over as manager. She proved a determined and effective entrepreneur. Meanwhile, George, who had been a Phi Delta Theta member at Indiana University and remained active in the fraternity’s national organization, landed a contract to print the Phi Delta magazine, and in time also signed up a number of other fraternities and sororities.

George’s educational contacts—his father was dean of the Indiana University law school—helped the company win orders for university catalogs and annuals, as well as some textbooks and magazines. Thus, Banta Publishing grew mainly as a specialist in book and periodical printing. Not that it turned away commercial customers; in its early days, it regularly printed large-volume promotional booklets for Quaker Oats. In 1910 Banta was ready for its own building, a two-story plant just across the Fox River. These facilities, vastly enlarged over the decades, remained the site of Banta Company’s offices, the largest division of Banta Corporation, and a complex of printing facilities into the mid-1990s.

In 1911, 18-year-old George Banta Jr. dropped out of college and assumed charge of the office. The replacement of Nellie was somewhat brusque, wrote Appleton Post-Crescent contributor Kay Roberts, and while the “Founder’s wife” reminisced that she “missed the five dollars a week she earned,” she also maintained she had much to attend to at home and “left with few regrets.” George Sr., while periodically bothered by health problems, continued to be a major sales contributor, and retained overall leadership as president until his death in 1935 at age 76. Nellie then assumed the presidency until she died in her 86th year in 1951.

The company grew nicely, with emphasis on the educational market. As a historical review in the 1990 annual report noted, Banta was emphatic on keeping “pace with [technological] change.” But “rather than attempting to serve many markets, the company focused initially on ones in which it could build special strengths and capabilities.” Even though the company consistently ranked among the top five U.S. printers in the 1980s and 1990s, Banta liked to concentrate on numerous niche businesses, and sought to be the leader or a strong contender in each market it entered.

By the time of World War I, Banta was printing 184 scholarly, technical, and educational journals. The war years brought a harsher climate which lasted into the early twenties, but then, as the decade progressed, Banta benefitted from an “explosion in education.” By the end of the twenties, Banta found itself in the right place for an innovative concept. One of George Jr.’s brothers-in-law, Russell Sharp, wrote an elementary school workbook and turned to Banta to produce it. The company soon became the leader in printing workbooks as these softcover scholastic aids became a major educational tool from first grade right up through graduate school. Eventually this expertise helped make Banta a leader in softcover books for the professional market as well as for “trade” books (general-interest books sold through book stores).

Always technically progressive, Banta acquired its first web offset press in 1940. In the early days, the prevailing state of the art in paper, platemaking, ink, and other printing supplies limited the jobs considered suitable for offset. Banta became a pioneer in pushing development of improved supplies as well as speedier and higher-quality presses. As web offset developed into the printing method of choice for many applications, the expanding Banta Company established itself as a major player in the industry.

In 1946 Banta expanded beyond its home complex with the 42,000-square-foot Midway plant, built midway between downtown Menasha and nearby Appleton. Even as it kept expanding its printing business, the company contracted its name, dropping the “Publishing” to become George Banta Company, Inc. in 1954. The streamlined name also eliminated possible confusion about Banta’s role: it did the production work for books and periodicals, while publishers (who create and market books) were its customers.

Banta, which did barely $3.5 million in business at the end of World War II and $10 million in the mid-1950s, attained $33 million sales by 1968. Family leadership had been interrupted in 1961 when John H. Wilterding, who had started at Banta in 1923, succeeded George Banta Jr. as president. However, on Wilterding’s retirement in 1965, George Banta III, the son of George Jr., took over. Conglomeration had become the fashion throughout American enterprise, and the printing industry was no exception. George III related: “We had many beautiful offers to sell out… but we decided to remain independent.” Banta set out to prepare itself for the new order. In 1968 it brought in Menasha-born Kimberly Clark executive William H. Fieweger as president, with George Banta III as chairman, a post he retained until his retirement in 1983.

Within a year, the Banta-Fieweger team had the company’s first long-range expansion plan ready, based on the recognition that the industry was “becoming increasingly capital intensive” and hence required “larger economic units.” The Banta plan aimed to: continue internal growth, “notably from educational sources”; acquire selected small firms to promote expansion; and encourage technological advancement not just by buying new equipment, but by innovating new methods and directions. The acquisition program began in 1969 with the $2.4 million purchase of Daniels Packaging of Rhinelander, Wisconsin, which specialized in producing foil and flexible film wrap for food and other grocery products. Somewhat ironically, this first acquisition also became the first major unit disposed of by Banta; in 1989 the greatly expanded Daniels was sold for an after-tax gain of $9.6 million.

In 1970, Banta added periodicals printer Hart Press of Minnesota and Menasha neighbor Northwestern Engraving, which prepared color separations for printers (Banta was a major customer). These acquisitions along with internal growth boosted Banta sales volume above $50 million for the first time. In March of 1971 Banta was ready to go public, selling 455,000 shares (a 29 percent interest) at $12.50 per share. A series of stock splits has turned each of these original shares into nine current shares. By 1995, the share value had multiplied more than 25-fold.

Acquisitions continued through the 1970s and 1980s. Ling Products of Neenah, Wisconsin, acquired in 1973, made disposable products for the health and food service industries, such as examination gowns, table covers, and bibs. KCS Industries of Milwaukee, purchased in 1975, produced point-of-sale displays. And R. J. Carroll of Harrisonburg, Virginia, bought in 1976 and later named Banta Harrisonburg, provided Eastern production facilities for Banta’s basic education-oriented business. Banta’s most important acquisition came in 1988, under the leadership of chairman and CEO Harry W. Earle, when Minnesota-based Beddor Companies joined the fold. The move increased Banta’s size by about two-thirds and put it into consumer catalogs and direct mail materials (thus serving the fastest growing segments of retail merchandising). It also added to Banta’s soft-cover capacity through printer Viking Press of Minneapolis (no relation to the well-known New York publisher Viking). The merger pushed sales above the half-billion mark in 1989 and brought Banta into the Fortune 500. At the same time, Banta further streamlined its corporate name to Banta Corporation.

Acquisitions of “high-quality” companies remained high on the Banta agenda in the 1990s. Thus, in 1994, Banta added Danbury Printing and Litho of Connecticut, augmenting its capabilities in the direct marketing industry with a strategic manufacturing facility in the Northeast. Another 1994 acquisition was United Graphics of Kent, Washington, which gave Banta a second Western printing plant to complement its Utah facility, Bushman Press, acquired in 1991. Through the United Graphics purchase, Banta also added software giant Microsoft Corporation to its already broad roster of top-level computer industry customers.

All told, Banta has added 23 companies during the first quarter century of its acquisition policy. It expected acquisitions to contribute at least a third of future company growth, according to Donald D. Belcher, who came to Banta as president in the fall of 1994 from office supplier Avery Dennison and took over the chairmanship and CEO position from retiring Calvin Aurand, Jr. in 1995. Banta has succeeded at obtaining strong growth from companies once they have been acquired, which meshes into its overall plan for “aggressive and profitable growth” from internally developed new products and services.

Banta has organized its many acquisitions into several product groups that operate as largely autonomous enterprises, an approach the company believed would make them “quicker, more nimble, and better able to respond to customer needs.” The three largest groups in the 1990s, each with a little over one-fifth of total volume, were the Book, Catalog, and Direct Marketing units. The Banta Book Group handled both educational and general books, and also produced instructional games such as “Trivial Pursuit,” a game wildly popular in the mid-1980s.

The Publications Group, which accounted for about one-eighth of total volume, put out more than 500 educational, trade, religious, and fraternal magazines with circulation mostly in the 15,000-to-350,000 range. Niche-conscious Banta specialized in this type of periodical rather than large-scale consumer magazines “because they are less subject to cyclical variation in number of advertising pages; also because regular planned growth is easier to achieve, since each new periodical adds only modestly to sales.” Smaller groups were the Banta Digital Group, Information Services, and the more specialized KCS (signs, displays, etc.) and Ling (single-use products) units. One promising new product at KCS was U.S. postage stamps; it was among the first companies to win a contract when the government privatized some of its stamp printing in 1990.

Banta expected to stay strong in the 1990s, noted Belcher, by “investing ahead of the curve in new technologies.” Between 1990 and 1994, Banta had reinvested $265 million in its operations, $87 million in 1994 alone. Such a figure represented around 10 percent of revenues, more than double the industry average. Capital acquired in the 1990s included a $20-million printing press whose wide web permitted the printing of 50 percent more pages across the web of paper while running at nearly 50 percent greater speed. In another plant, a new Xeikon full-color digital system printed entirely from digital information, requiring no film or plates. Other electronic and optical systems, often enhanced by proprietary software programs, sped prepress preparation and after-printing processing (e.g., addressing and distribution), enabling Banta to offer fast turnaround and highly customized service, such as catalogs or direct mail pieces with content tailored for specific recipients. Similarly, college texts could be custom-bound to match a professor’s specific course curriculum.

Chairman Belcher expected Banta’s core business to continue to be “imaging on paper,” even as the design, production, and distribution processes which turn out these familiar print products are being “revolutionized by digital technologies.” And he predicted that a broad array of non-print products, including CD-ROMs and “image archiving,” would show proportionally faster growth than print. An example of the new kinds of jobs taken on by Banta was an electronic catalog for a major business-to-business cataloger that was essentially a CD-ROM version of its printed catalog. For computer industry customers, Banta not only printed instruction manuals but provided on-demand electronic printing, duplication of floppies diskettes and CD-ROMs, and assembly of software kits.

Though Banta had long expressed interest in the global market, foreign expansion had barely begun in the 1990s. In 1994, Banta established a software documentation unit in the Netherlands, which enabled domestic customers to download data for printing and distribution overseas. Similarly, chairperson Belcher explained, “we will have to go to the Far East,” if only to meet requirements of domestic customers. In 1994, Banta had also set up KCS-Villanueva as a joint venture in Monterrey, Mexico, for producing in-store point-of-sale displays in Latin America.

Overall, the Banta formula has worked nicely. Since going public in 1971, the company has averaged annualized 13 percent sales and nearly 15 percent earnings growth. It earned $47 million ($2.33 per share) in 1994, and it has raised its dividend for 18 consecutive years. Revenues reached $811 million in 1994. As it moves ahead, Banta sees its industry’s future based on capturing information digitally and then “re-purposing” it into both print and digital formats. And it is intent on leveraging technology leadership to be in the forefront of this future.

Principal Subsidiaries

KCS Industries Inc.; Ling Products, Inc; The DI Group, Inc.; Danbury Printing & Litho, Inc.; United Graphics; KnowledgeSet Corporation; Banta Direct Marketing, Inc.; Banta Software Services International, Inc.