The Cole Papers August 2002
Vol. 13, No. 8
Atex agonistes -- Venerable supplier merges once again, this time with Media Command

Like the blind, imprisoned Samson -- whose power had been shorn, if not by Dalilah, then by the Philistines -- the Atex of June 2002 was but a mere hulk of its former greatness.

Not that this had been a short time in coming; the downward spiral for Atex probably started with its acquisition by Eastman Kodak Co. in the early 1980s. In fact, the management of the early 21st century had actually put the company on a footing where it had made money (a mere $700,000 on income of more than $35 million in 2001).

But tragedy had certainly befallen the business known as Atex Media Solutions Inc., much like the tragedy chronicled by Milton in his epic poem Samson Agonistes. Atex’s main investor, the Norwegian investment bank Kistefos, was looking for someone to share the burden.

Coincidentally, Robert Banner was looking to make some more investments in the publishing systems business.

Banner, you may remember, is the London venture capitalist who helped engineer a buyout of Geac Computers Ltd.’s publishing systems business last year, in the process creating Media Command Inc. (see The Cole Papers, September 2001). Banner and his team had, in fact, made the announcement of their acquisition of The Barry Group of Bethesda, Md., at NEXPO 2002 (see The Cole Papers, July 2002).

The rumors inside the convention hall in Orlando were as thick as the humid air outside -- either Atex was buying Media Command or Media Command was buying Atex. Principals on both sides pooh-poohed this idle chatter.

Nonetheless, a mere 16 days after the show closed the companies jointly announced a plan to merge.

"It will be the blind leading the blind," said one industry insider, making an unconscious reference to Samson. Others suggest that Kistefos pulled one over on Banner; others say that Banner got the gold standard of newspaper systems brand names for a song.

These assessments are all probably too harsh. While neither the Atex group nor the Media Command group were making buckets of money, both were cash positive (a documented feat for Atex and an article we must take on faith from Media Command executives).

The histories of both companies are littered with periods of loss following loss -- especially in Atex’s case. Extensive research indicates that there have been only two years of profitability at Atex since 1981, which were 1998 and 2001. It is estimated that since 1981, when Eastman Kodak Co. purchased the company from its founders, Atex has lost more than $180 million.

While Media Command’s numbers are nowhere near as bad -- in fact, Geac used the old Collier-Jackson business as a cash cow -- it is still an acknowledged triumph that the management team had turned the business around in the last 11 months.

In addition, the most recent administration at Atex has brought back a lot of old and familiar names -- Ben Smylie, Ron Kadomiya, Keith Randall. These are people who know newspapers and where Atex sits in the firmament.

Lastly, it appears that Banner is a patient investor; his history certainly seems the case. As the hands-on, day-to-day head of the new Atex Media Command, he will have his finger on the pulse of all the business' regions.

Atex Media Command will have a number of things going for it -- a killer brand name, experienced managers, a Herculean understanding of the newspaper business -- and a number of things going against it. These include a vast, worldwide business of 500 people (most of whom have been trained to distrust one another), research and development groups flung all over the place, and so many product overlaps it isn't even funny.

Inside, I detail the deal and the way the company theoretically is going to run, with plenty of quotes from all the major players.

Also inside, we take one last walk across the NEXPO 2002 show floor and look at six companies that piqued our interest.

There was no happy ending for Samson; his agonies were legendary. It is with not a little optimism that we hope that the new Atex Media Command won't suffer the same fate.



Coffee grinder image: Copyright © 2002, PhotoDisc.

From THE COLE PAPERS, August 2002, Copyright © 2002, All Rights Reserved.

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Modified date: 08/ 9/2002, 9:41:10 AM.