When U.S. Print Providers Merge, What Are They Really Buying?

In a shrinking market, consolidation may be a lifeline, but will it deliver a digital future?

At Treeline Research, we’ve spent years analyzing the global Print Service Provider (PSP) market and applying those lessons to the U.S. What we see today should serve as a wake-up call. The U.S. PSP landscape is on the cusp of a consolidation wave, similar to trends already reshaping Europe and other markets.

Why? Because the U.S. mail pie is shrinking, and faster than many are willing to admit.

Mail Volumes Are in Freefall

The USPS Office of Inspector General projects that First-Class Mail volumes will decline by 40% by 2035, driven by businesses and consumers migrating to digital channels. Treeline Research’s 2024 Paper Suppression Study suggests the transition could happen even faster. Transactional mail volumes, the bread and butter of many U.S. based PSPs, are on track to fall by 50% or more by 2030.

Growth for U.S. PSPs is not coming from expanding markets. Instead, it is driven by enterprises outsourcing their in-plants, competitors acquiring each other’s book of business, or regional players consolidating print volumes. Even these “growth stories” mask a harsh reality. Margins are thinner, and the fight for share is taking place in a market that is shrinking in absolute terms.

A Case Study: FSSI Acquires Cathedral

The July 1, 2025 merger of FSSI and Cathedral Corporation’s Business Services Division is emblematic of this shift.

FSSI, a leading provider of print, mail, and electronic document outsourcing, expanded its national footprint with the acquisition, adding facilities in Rhode Island and Florida. CEO Jennifer P.W. Dietz called it “perfectly aligned with FSSI’s long-term vision to expand our presence to the East Coast while delivering enhanced services and support.”

While the deal bolsters FSSI’s print capacity, it also raises a critical question. Will the company leverage its expanded footprint to accelerate digital adoption or rely on acquired print volume as a short-term fix in a declining printed communications market?

Globally, PSPs that have survived and thrived during similar shifts have done so by becoming digital-first providers, not just by chasing a greater share of an eroding printed communications market.

It is also worth noting that FSSI is an employee-owned company (ESOP), which can be a strength that aligns the workforce with long-term company success. However, it may also present challenges when pursuing solutions that could erode or cannibalize print volumes, which is the core of its current business. This dynamic could influence how aggressively FSSI invests in digital transformation solutions.

M&A Activity Shows Signs of Acceleration

Recent data from The Target Report suggests that merger and acquisition activity in U.S. commercial print is not only recovering but may be entering a new phase of acceleration. After a pandemic-induced slowdown, annual deal volumes rebounded from a low of 27 transactions in 2020 to 34 in 2024. May 2025 saw a spike in activity, with five commercial print deals, the highest monthly count in years.

Yet many owners are signaling fatigue. As The Target Report notes, there has been an increase in “exploratory outreach” from owners who are neither thriving nor in distress but are seeking a graceful exit.

Owner Fatigue: The Silent Driver of Consolidation

The structural pressures on PSPs are not just financial. They are deeply personal. Years of margin compression, technological disruption, and pandemic-era stress have left many leaders burned out.

This reality is reflected in initiatives like She*t for Brains, a mental health and well-being movement launched by industry leaders in 2024. What began as a raw conversation about leadership and resilience has grown into a powerful community addressing burnout and the emotional cost of running a print business in an era of constant disruption.

As co-founder Jon Bailey shared: “Some years I’ve walked through industry events feeling like I was on top of the world. Other years, I felt like I was just barely holding it together. And I know I’m not the only one.”

For family-owned and closely held PSPs, decisions about selling or shuttering are often as much about identity and legacy as they are about balance sheets.

Lessons from Communisis: Paragon's Bold Move

The collapse of Communisis and subsequent acquisition of parts of its operations by Paragon in the UK highlights another reality: consolidation is not just a strategy for growth. It is often a necessity for survival.

As Paragon CEO, Jeremy Walters remarked: “In times of market contraction, it’s those who can innovate and scale that will create stability for clients and employees.”

Paragon’s acquisition underscores how larger, well-capitalized PSPs are able to “vacuum up” remaining print volumes, strengthen their client base, and bring tighter control to operations.

As has also been observed by Treeline Research: “In customer communications, printed volumes don’t just disappear; they just find a new home. The need to communicate is only increasing, especially within digital channels.”

For U.S. PSPs, the parallels are clear. In a market with too much capacity chasing steadily declining demand, the winners will be those with the resources and foresight to scale and invest in digital transformation. Those without a plan may find themselves acquired or left behind entirely.

Why Private Equity May Not Be the Answer

Private equity has been an active participant in PSP consolidation and is viewed as an exit strategy by some, but its involvement may not provide the long-term stability the market needs. Even when print operations remain profitable, declining mail volumes and shrinking margins mean these investments often struggle to deliver the returns PE firms expect over time.

As Printing Impressions Magazine noted: “Private equity firms are discovering that while print businesses can generate strong cash flow, without scalable digital strategies, they risk being caught in a shrinking market that erodes enterprise value over time.”

PE-backed companies can inject fresh capital and operational discipline, but without a strategy to evolve beyond print, they risk becoming trapped in a cycle of acquisition and cost-cutting. Eventually, these firms may find that print volumes alone, even when well-managed, are insufficient to sustain long-term growth and satisfy investors. This underscores the urgent need for PSPs to diversify into digital-first offerings and customer experience management solutions to remain relevant.

Three Options for U.S. PSPs

As consolidation accelerates, Treeline projects that U.S. PSPs face three possible paths:

1. Invest in digital capabilities to capture customers migrating off print. This means more than offering multi-channel email delivery or e-presentment. It requires building true omni-channel solutions, integrating customer journey analytics, deploying interactive applications and enabling enterprises to manage communications across print, digital, and emerging channels such as WhatsApp. Those who succeed here will move up the value chain and remain relevant as enterprises shift spend to digital experiences. [TreelinePress is affiliated with DNOW!, a firm helping Print Service Providers (PSPs) transition to digital-first business models.]

2. Sell while their businesses still have value in the shrinking print market. For many family-owned or closely held PSPs, this may be the most viable option. As mail volumes decline, there is a limited window to extract value before financial pressures mount further and buyers begin seeking only distressed assets.

This may, in fact, have been the motivation behind the merger of FSSI and Cathedral Corporation’s Business Services Division. [Speculation] Cathedral may have faced increasing pressure from enterprise clients to deliver advanced digital capabilities. Rather than invest heavily to build those solutions, the company opted to sell this portion of its business to FSSI, which was seeking additional print volume and a national footprint. [Unverified] This suggests a growing trend where PSPs unwilling or unable to make the leap to digital transformation and interactive customer experiences see acquisition as their best exit strategy.

3. Hold on, hoping for a resurgence in print demand, a gamble few can afford. While print will retain a place in the communications mix for certain audiences and industries, betting on its revival as a growth engine is risky. Rising postal rates, customer digital preferences, and enterprise cost-cutting efforts all point to a future where print plays a smaller, more specialized role.

The choices PSPs make now will determine whether they emerge as consolidators, attractive acquisition targets, or casualties of an industry in transition.

Meanwhile, a New Breed of PSPs Is Emerging

These digital-first providers are not chasing print volumes to compete on price. Instead, they are actively seeking print business with the explicit goal of converting it to digital channels. Their strategy is driven by enterprise clients eager to reduce postage costs and streamline communications.

In this new model, having a consolidated view of all customer communications is becoming essential. Enterprises want partners who can integrate, manage, and report on communications across all channels—not just print. The winners will be those PSPs that can provide a holistic understanding of the customer journey from start to finish, delivering data insights that feed directly into AI-powered tools and marketing platforms.

The recent acquisition of Adare SEC by Mail Metrics, backed by private equity firm MML, underscores this shift. Mail Metrics’ expansion in the UK demonstrates how digital-first PSPs are building multi-channel communication capabilities, helping enterprises transition away from print while ensuring compliance and continuity in critical communications.

Nick Keegan, group CEO said that Mail Metrics acquired Adare SEC to combine the strengths of the two companies in order to “deliver innovative and compliant communication solutions for our growing client base across the UK and Ireland”.

Software vendors are taking notice, and companies like FCI CCM’s entry into the U.S. market is further evidence of this trend gaining momentum. FCI is offering PSPs a built-for-purpose platform designed to help deliver a truly consolidated view of customer communications. Its VARTA solution enables PSPs with banking and financial services clients to manage print and digital channels in a unified way, providing enterprises with the tools to migrate customers to digital while maintaining compliance and control. For PSPs, platforms like this present an opportunity to leapfrog homegrown legacy CCM systems and respond to growing client demands for seamless, omni-channel and real-time communication management.

The Road Ahead

Hunting for increasing print volumes in a declining market is ultimately unsustainable. As in the UK and other markets, the U.S. PSP ecosystem will likely consolidate into a handful of large players, those that print efficiently while leading with digital services.

For U.S. PSPs, the message is clear: The clock is ticking. Adapt now or risk being swept aside in the coming wave of digital disruption that is already on it’s way.

At Treeline Research, we help print service providers, investors, and innovators understand these market shifts and position themselves for success in the era of digital-first communications. Our TreelinePress research and insights are shaping critical conversations across the customer communications ecosystem.

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