Workflow Merges with Enterprise Acquisition Corp; Goes Public
WF Capital Holdings Inc., the privately held parent company of Workflow Management Inc., of which Workflow One (asi/333647) is a division, has announced it has signed a definitive merger agreement with Enterprise Acquisition Corp. (AMEX: EST), a special purpose acquisition company, for $669 million. Included in the agreement is a letter of intent to acquire two additional businesses "in the marketing services and promotional production solutions industry" that may be completed by the closing of the merger. The deal will leave the Workflow management team in place running the combined company, which will be known as Workflow Corporation and will be listed on the NASDAQ.

"This is the first step in our ability to go public," says Scott Berry, chief sales and marketing officer for Workflow One. "A merger is what you call this but it's an IPO in reverse. Instead of going public and waiting for people to buy the stock and have the money come in, what we've done is worked with Enterprise, which had the money and was looking for a company. We did not merge with an operating company but rather a group of investors. That's why all our leaders are going to stay the same because we aren't combining two executive teams and two sales forces."

The infusion of capital will allow Workflow to reduce its $490 million in existing debt and expand its operations further, says Berry. "We made one acquisition earlier in the year but we wanted to make more," he says. "This will allow us to do that with stock as part or all of the consideration going forward. It will also help attract and retain our key employees and enhance our reputation as an industry leader. Early reports indicate that we will be, before acquisitions, over $120 million in sales for 2008 – and that is all organic growth. If you add in the new acquisitions, I think potentially we can do even better than that."

Workflow currently ranks number 13 on the Counselor Top 40, after reporting $90 million in 2007 North American ad specialty sales.

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Hospitality Mints Acquired By Equity Firm
Hospitality Mints (asi/61820), a subsidiary of private-equity firm American Capital Ltd., has been acquired by Cleveland-based private-equity firm Linsalata Capital Partners, along with an investment from the supplier's senior managers. Specifics of the deal were not revealed but the purchase was made by Linsalata with a portion of capital from its sixth fund which totals $425 million in committed equity capital.

"Hospitality Mints has developed an excellent brand reputation based on a high-quality product, customized printing/wrapping and excellent customer service," says Eric Bacon, senior managing director, Linsalata Capital Partners. "The company is a strong player in a niche of the large confections market, which is consistent with our acquisition criteria for food-related businesses."

A supplier of mints and candies, Hospitality Mints sells to more than 10,000 customers in the promotional, retail and food service industries. The purchase echoes the deal made four years ago in which 85% of Hospitality Mints was purchased by American Capital with an investment of $46 million, with the remaining investment from the supplier's management.

"We are excited to be partnering with LinCap and continue executing our plan for growth," says Allen Peterson, CEO of Hospitality Mints. "From the start of the process, it was clear that the LinCap team shared our vision for the future of the company."

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VistaPrint Named in Four Federal Class-Action Lawsuits
Four class-action lawsuits have been brought against VistaPrint, a small business marketing company with over 15 million customers worldwide, regarding unauthorized charges of the credit cards and bank accounts of customers who purchased items on the company's U.S. Web site. VistaPrint Limited and its U.S. subsidiary, along with Vertrue Inc. and its subsidiary Adaptive Marketing LLC, were named as defendants in all four cases. VistaPrint revealed on Thursday in a press release that pending cases were filed in New Jersey and Texas, but Counselor has learned that additional class-action suits were filed yesterday in both Massachusetts and Alabama.

"As we allege in the complaint, we believe that VistaPrint and Vertrue are acting in concert to access consumers' credit card information and then begin charging them relatively small amounts," says Jerome Noll, counsel for the plaintiff that filed the Massachusetts suit. "You're talking about $14.95 a month or $12.95 a month, hoping that consumers just won't notice."

Dolores Gordon, the plaintiff in the Massachusetts case, claims that there were six unauthorized charges on her credit card of $14.95 each after she purchased business cards from VistaPrint on Sept. 1, 2007. One unauthorized charge was allegedly from VistaPrint and five were from Shopping Essentials, a trademark of Adaptive Marketing. Gordon says she canceled her card to stop the charges. "She had contacted the defendants many times over the six months asking them for credit and for them to stop charging her," says Noll, whose firm has also filed a lawsuit in Connecticut against Vertrue. "They would tell her, 'Yes, of course, we'll give you the credit, of course we'll stop charging you.' They never did."

The complaints, all filed in federal courts, allege that the defendants were in violation of the Electronic Funds Transfer Act (which protects from unauthorized charges) and the federal Electronic Communications and Privacy Act (which prohibits the unlawful access of financial information). VistaPrint could not comment due to pending litigation. Its press release states, "VistaPrint believes it has meritorious defenses to these lawsuits and intends to defend these matters vigorously."

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Survey: 53% of Marketers to Cut Ad Budgets
A survey released from the Association of National Advertisers last week revealed that over 50% of marketers plan to reduce their ad budgets in the next six months. Eighty-seven percent of the respondents say they are already being pushed to reduce spending currently. The survey, conducted in early summer with 100 marketers across a number of industries, found that 63% were planning to cut their production budgets, and another 61% would delay new projects.

Reactions, however, run counter to the survey's findings. "That surprises me, a lot," remarks Dan Broudy, vice president of sales for Clayton Kendall (asi/162968). The timeframe would fall right into the lucrative holiday gift season, and Broudy has a hard time believing end-users would rein in their ad dollars during what is traditionally the strongest marketing push of the year. "You can't survive without marketing, especially because September to December, as you know in this industry, that's primo time for holiday gifts," he says. "All our retail guys, and we got a lot of retail customers, have to market in September to December or you're dead."

Broudy sees the possibility of companies holding their advertising dollars and then spending aggressively once fall arrives. Scott Stern of Norscot Group (asi/284520) believes the survey is too broad to indicate what will occur in the promotional products industry. "I don't foresee that happening at all," says the president and CEO of the Counselor Top 40 distributor.

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MAGIC 2009 Report: Think Green
Want a word to sum up this week's MAGIC apparel trade show in Las Vegas? Green. That's right, both enormous companies (think Nike and Patagonia) and smaller apparel firms exhibiting here this week are all waving the eco-friendly flag. For the first time, MAGIC has set aside a special "Ecocollection" pavilion reserved for more than 70 eco-friendly exhibitors. These companies aren't just displaying items made with eco-friendly fabrics, such as organic cotton or bamboo. Many are touting a number of other eco-friendly practices as well. For example:

• A number of exhibitors are handing out literature that gives specific information about the way the garments are manufactured to highlight the fact that the apparel is made in a socially responsible way. One firm, Our New Earth (which produces organic babywear), is distributing information about its co-op farm in India, which uses biodynamic farming to help regenerate the soil that produces the cotton for its garments. Another exhibitor, Clothes on the Line, says it employs native women in Guatemala to weave its natural fabrics, and declares itself "100% sweatshop and child-labor free."
• Other exhibitors are pledging to give some of their profits to environmentally and socially responsible causes. For instance, Me To We, which manufactures organic clothing, gives 50% of its profits to a worldwide charity for children.

The trade show is also packed with a number of quirky new fashions, some which have been met with mixed reaction. One company, Throx, promises to "solve the age-old mystery of missing socks," by selling socks in threes, rather than in pairs. There are also plenty of products to help Americans' expanding waistlines. One exhibitor, Hip T, promises to "cover women's assets" with a stretch fabric hip wrap worn over jeans. The item is purported to slim the overflow of flesh above the waistband (a.k.a. the "muffin top"). Another product on the show floor: "Tummy Tuck Jeans," offers an alternative to the surgical procedure. And still another product, "Chick Peeks," uses adhesives pads to cover women's excessive cleavage. No word yet on whether any of these vendors have plans to enter the advertising specialties industry.

Check out the next issue of Counselor's sister publication, Wearables, for more trends from MAGIC.

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Brown & Bigelow Purchases Bright Advertising
As first reported in a Breaking News Alert last Thursday, Brown & Bigelow (asi/148500) has announced its acquisition of Boise, ID-based distributor Bright Advertising (asi/146000). Financial terms of the deal were not disclosed. The purchase of the 52-year old company with annual revenues between $1.5 million and $2 million includes the assets, accounts receivable, inventory and equipment, as well as the Bright Advertising name.

Brown & Bigelow has hired seven of Bright's salespeople as well as former owner Gary Smith, who will remain with the company as sales executive. Smith's daughter, Felice Seaman, will also remain with the company and assume the role of regional office manager. Brown & Bigelow also signed a three-year deal with Smith to lease the company's building.

The office will do business as Bright Advertising, a division of Brown & Bigelow Inc., and operate the same as the other 17 B&B sales offices. "We are very excited about the opportunity to enter the Boise market with the purchase of Bright Advertising," says William Smith Jr., executive vice president of Brown & Bigelow. "Gary and Ann Smith are competent, honorable people who built a very successful business. We look forward to continuing their tradition."

Brown & Bigelow currently ranks number 25 on the Counselor Top 40, after reporting $69 million in 2007 North American ad specialty sales.

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The Joe Show: Bottle Openers
In this episode of The Joe Show, Managing Editor Joe Haley pops a top and shows off some of the latest bottle openers available on the market today. Saddle up to the bar, and check out some of the most unique and functional bottle openers that you can suggest to clients for their tailgate season that's coming up.

Click here to watch this geographical edition of The Joe Show.

Counselor's Best Places To Work Revealed; Click here
Earlier this year, Counselor set out on a mission to find the companies in the industry where employees simply love to come to work every day. We wanted to identify those workplaces that have loyal staffs, dependable and trustworthy management, solid and motivating benefits packages and overall team effectiveness that raises organizations to high levels of success.

Welcome to the 2008 Counselor Best Places to Work.What you'll find on this list are the 50 top workplaces in the ad specialty market today – as voted on by company employees themselves. For this effort, Counselor partnered with a third-party research firm, Quantum Market Research, which conducts Best Places to Work contests in more than 40 major cities, including Boston, Dallas, Miami, New York, San Francisco and Seattle. And now, the company has provided the research to determine the 50 best places to work in this market.
           
The list of 50 companies is certainly diverse. It has distributors and suppliers, Top 40 companies with hundreds of employees and small firms with only 15 staffers (in fact, to qualify for the program a company had to have at least 15 employees), organizations from east to west and north to south. Click here to see the full list of the 50 Best Places to Work in the ad specialty industry.

Brandango Purchased By World Emblem International
World Emblem International (asi/98264) announced it has acquired promotional marketing agency Brandango Inc. (asi/145089). Financial terms of the deal were not revealed. World Signature International, the distributor division of World Emblem that specializes in promotional products and branded apparel, will change their name officially to Brandango. Founder Michael Lara will become president of the new Brandango and a second employee will be retained. The acquisition will allow World Emblem to increase its client base and strengthen vendor relations. Brandango will also offer a distribution and fulfillment division that will allow storing, shipping, tracking and re-routing of orders.

Check Out ASI Internet Radio
Every Tuesday morning from 10:30 a.m. eastern time to 11:00 a.m., a team of ASI editors will be debating the most important topics facing the industry. Of course, we'll also be offering our own offbeat look at the market. This week we discussed highlights from the MAGIC Show in Las Vegas, promotions gone awry, federal highway uniform compliance and the Democratic National Convention.

If you missed the show, don't worry. A recording is now available at www.asicentral.com/radio. And, don't forget to join us next Tuesday morning, September 2, at 10:30 a.m. eastern time when we'll share our favorite Labor Day BBQ stories. Of course, we'll also be taking calls from the audience, so please do call us at (215) 953-4979 to hear your voice on the air.

Share Your Writing Instrument Case Studies
Counselor's 4th Annual Writing Instruments Issue is arriving soon, and we want to feature your best case studies about pens, pencils, markers, highlighters and anything else that applies. Did your clients use pens in an innovative, creative, fun or interesting way? We want to hear about it. E-mail your best stories – clients can remain anonymous – to cmittica@asicentral.com.

In the News
Broder Bros. (asi/42090) announced its second quarter net sales were $257.6 million, an increase of $8.2 million over its Q2 2007 sales. Its sales for the first six months of the year totaled $454.3 million, an increase of $4.3 million from the first half of 2007.

Charles River Apparel (asi/44620) has launched its "Be Pink Proud" active wear clothing line. The company will donate a portion of the profit from the line's sales for breast cancer research.

Custom HBC Corporation (asi/47934) was named as one of the 500 fastest-growing private companies in America by Inc. magazine.

Dolphin Communications and Promotions (asi/181662) announced that Mitchell Sims, a former employee, is not authorized to use the company's name or ASI number in any industry dealings.

Drummond Printing Inc. (asi/50873) has added 10,000 square feet its manufacturing facility in Arkansas.

ETS Express Inc (asi/51197) introduced its "h2go ss by design" series, which gives customers a choice of 36 imprint art designs that can be put on its stainless steel water bottles.

Geiger (asi/202900) hosted a 5K walk/run in support of the American Lung Association and Norwood Cedar Rapids Flood Relief Fund.

Hammond Greetings and Promotions (asi/219147) has redesigned its Web site and added a line of holiday business cards.

Haws USA Inc./The Carhartt Line (asi/43861) has moved to a new location with new phone and fax numbers: 1100 Classic Road, Apex, NC 27539, phone: (919) 267-3231, fax: (888) 259-6123.

Heritage Sportswear (asi/60582) now has Gildan's 64000 Softstyle Ring-Spun Cotton Tees in stock in eight different colors.

iPromoteU (asi/232119) held its inaugural SupplierPalooza at The Auld Dubliner in Long Beach, CA, on August 6.

Magna-Tel Inc (asi/68480) honored Dede VerVynck in recognition of her 25 years of outstanding service to the company.

Motivators Inc. (asi/277780) was named as one of the 5,000 fastest-growing private companies in America by Inc. magazine.

Penn Emblem Company (asi/62485) announced the beginning of its online E-Invoicing and Statement Service as part of its "Go Green" initiative.

Pingline (asi/78137) was named as one of the 5,000 fastest-growing private companies in America by Inc. magazine.

ROBYN Promotions (asi/309656) was named to the Inc. 5,000 list for the second straight year.

Tehama (asi/41560) announced that, as part of its new "Green Education Initiative," it will participate in the "Green Movement" roundtable at the PGA Fall Expo in Las Vegas.

TSC Apparel (asi/90518) announced it will now provide live online customer support.

VistaPrint (asi/352529) announced that CEO Robert Keane was named a finalist for the Mass Technology Leadership Council's 2008 CEO of the Year award.

World Emblem International (asi/98264) hosted its first blood drive with the Community Blood Centers of South Florida on July 25.

People on the Move
Corporate Express Promotional Marketing (asi/168786) has hired Mark Peterman for the position of vice president of performance solutions for the company's incentives business unit.

Halo/Lee Wayne (asi/356000) named Jim Stutz as its new executive vice president of sales and business development.

PromoShop (asi/300446) announced the additions of Jodi Walton as sale coordinator, Sue Young as accounting clerk and Norma Parra as inventory and purchasing coordinator.

The Upper Midwest Association of Promotional Professionals inducted Phillip J. Sibinski, MAS, of PJS Inc. into its Hall of Fame.

WorkflowOne (asi/333647) announced that Tamara A. Borello has joined the company as merchandising manager of promotional marketing operations.

The following are the dates and locations for The ASI Show in 2009:
Orlando: January 3-5
Dallas: February 4-6
New York: March 8-10
Chicago: July 21-23
ASI Holiday & Incentives Expo, Las Vegas: September 16-17
Plus, don't miss the ASI Advantages Roadshow, the industry's #1 traveling show. Visit www.advantagesroadshow.com for the complete schedule!