Investing wisely is all about understanding trends and anticipating new markets. In the printing business, the volatility of the last decade has added a lot of confusion and panic to the marketplace. One clear trend has emerged: Wide-format digital printers, primarily 30” and above, are prime targets for acquisition.
Several trends are occurring in the marketplace, and they all contribute to the fact that the acquisition of a wide-format digital printing company makes a great deal of sense for the smart investor.
1. Wide-format digital printing is far-outpacing other sectors of the business. According to Tim Greene of InfoTrends, worldwide revenue for signs and graphics companies is expected to grow at a 5% rate over the next five years while the overall printing industry is expected to grow 1% of the same period. When you consider those numbers are strictly retail, and don’t include any types of installation services, you can see where the growth will be.
2. eReaders are rocking our industry to the core. Everywhere you turn, bookstores are closing and eReaders are springing up. With so much of the printed word going digital, the uncertainty should give any printer pause. Some magazines and newspapers will persevere – but who?
3. We still have roads and cars that drive on them. The last time I checked, traffic was still a nightmare in many of our urban areas. Despite rising fuel costs, no one is forsaking their car for a city bus. What that means is we’ll still need roads signs and LED outdoor billboards.
4. Who knows where digital will go? I recently read that computing power grows exponentially. That means today’s digital innovations could be replaced in a few years by some new, more exotic technology. If you’re focused on the digital end of the business, you’re going to ride a wave of innovation with no end in sight.
5. Frivolity has come to a close. Just before things went south in 2008, it was easy to make money in any industry. But as purse-strings have tightened, we now see that companies looking to make an acquisition are focused on a good strategic fit. Now one can afford to take a flyer these days, no matter how deep their pockets may be.
Wide-format digital printing is doing quite well in the printing business, while the rest of our industry seems to be mostly flat in terms of growth. Unless you want your acquisition to flatline, you might want to put a wide-format digital printer at the top of your wish list.
(Photo by woodleywonderworks)
If you're looking to make a strategic acqusition, download Rock LaManna's Free Acquisition Criteria for Printing Companies.