Novation Names Distributors as Suppliers; Dumps Moore Wallace
Novation, the largest volume group purchasing organization in the health care field, reached tentative agreements with two national distributor organizations for its document management needs. Novation facilities could buy more than $1 billion annually in the categories covered by the contracts. American Solutions for Business, headquartered in Glenwood, Minn., and International Business Solutions Alliance (IBSA), Bowling Green, Ky., are finalizing contracts with Novation that will take effect Jan. 1, 2005. In addition, Relizon, Dayton, Ohio, is the only national direct-selling company to be awarded a tentative contract.
Moore Wallace and Relizon have contracts with Novation that expire Dec. 31. This means that RR Donnelley, which owns Moore Wallace, will no longer have a contract with the largest GPO in the medical industry. The E-Weekly has learned that both Moore Wallace and Standard Register submitted RFPs to Novation.
Contracts run for three years with the possibility of two one-year extensions. Novation is owned by VHA and University HealthSystem Consortium members. VHA and UHC also own HealthCare Purchasing Partners International (HPPI), a GPO that outsources its contracting to Novation.
The long-awaited announcement by Novation gives American and IBSA a highly sought-after entrée into hospital accounts and other medical facilities. Some hospitals--especially larger ones--have been difficult to penetrate since health care GPOs began issuing contracts to the majors several years ago.
While American and IBSA--and their manufacturers--will benefit from the contracts, it's unclear how other distributors will fare. After all, for the last several years, distributors have told hospitals they can offer better pricing than the majors and better coverage in rural areas. They have touted their independence from captive plants. Now that two distributor organizations are finalizing contracts, the marketing message by other independents may need to be tweaked.
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Printegra Acquires Tejas Graphics' Customer Lists
Printegra, a manufacturer based in Peachtree City, Ga., acquired all sales dockets and existing customer lists of Tejas Graphics Inc., a regional wholesale manufacturer located in Fort Worth, Texas. Tejas Graphics decided to join forces with Printegra to better serve its customers, according to a press release. The acquisition, effective Sept. 1, is consistent with Printegra's strategy to stimulate growth through acquisitions, said Casey Campbell, Printegra's president and CEO.
RR Donnelley to Close Plant
Nearly 100 people will be out of work when Chicago-based RR Donnelley closes its San Luis Obispo, Calif., plant at the end of the year. The plant formerly was owned by Lisle, Ill.-based Wallace Computer Services and has operated for nearly 20 years. Employees there found out about the closure this week despite prior reassurances from management that the plant wouldn't close, according to KSBY-TV in San Luis Obispo. An RR Donnelley spokesperson told the TV station that the company's decision was necessary in order for the firm to remain competitive. The spokesperson also said employees could transfer to RR Donnelley's Visalia, Calif., plant and would receive a severance package, benefit continuation and counseling.
Earlier this year, RR Donnelley acquired Moore Wallace Inc. in a deal the companies valued at $2.8 billion. The deal occurred only months after Moore Corp. Ltd. bought Wallace Computer Services for $1.1 billion in cash and stock.
Plastag Holdings Purchases Barry Fiala Assets
Plastag Holdings LLC, Elk Grove Village, Ill., announced the purchase of select personalization and fulfillment assets of Barry Fiala Inc. to supply turnkey solutions to companies serving the retail sector and promotional markets. Plastag Holdings now has a license to manufacture, use, sell and offer to sell point-of-sale activated products covered by claims of United States Patent No. 5,918,909.
Champion Acquires Syscan Corp.
Champion Industries Inc., Huntington, W.Va., purchased all stock of Syscan Corporation, Charleston, W.Va. The acquisition is an all-cash purchase with a contingent earn-out feature. Syscan was founded in 1959 as a West Virginia manufacturer under the name "West Virginia Business Forms Inc." The name was changed in 1987. The company is a regional provider of integrated business products, administrative services and procurement solutions that include its enterprise resource electronic catalog. Its geographic markets include West Virginia, northern Virginia, Pennsylvania, and central and eastern Kentucky.
Consolidated Graphics Won't Acquire Newbridge
Consolidated Graphics Inc., Houston, announced that negotiations regarding its intent to acquire Newbridge Corporation, Dallas, have been terminated. The company said the proposed transaction had not been factored into its prior financial guidance and will have no impact on future financial results. It will continue to evaluate other acquisition opportunities.
