Three Seller Types in Successful Mergers and Acquisitions
The economy is showing signs of improving, but the lesson learned from the past is that no investor is going to take a flyer on the mere promise of greener pastures. It’s why today’s successful mergers and acquisitions are largely divided into two camps: The Haves and the SomedayHope-to-Haves.
The Haves: Say hello to the profitable, highly-niched printing company. Whether they’re strategically aligned in red-hot market segments like hydrographics or dye-sublimation, they’ve carved out a very specific and highly profitable market segment.
These printers are making a profit, and a nice one at that. Their multiples are tracking upwards of five, and they’re a well-managed, visionary bunch. This is a group often soughtout by bigger printers that use M&As for strategic growth.
The SomedayHope-to-Haves:This group could include a printer who is niching in a specific niche, but may need a cash infusion to build assets or fund a marketing program. They’re much like the Haves, but they need a little push to get over the top.
The Hope-to-Have Agains: Here lies the traditional commercial or screen printer who has found the recession has been brutal on their profit margins. They’re scrambling to keep pace with the new technologies and innovations in the industry, but they do have a solid customer base. This base could be useful to a company looking to gain access to a certain region or to expand their profitable niche.
Both the SomedayHope-to-Haves and the Hope-to-HaveAgains are willing to work with an earn-out agreement to restore them to where they once were. For more on earn out agreements, check out my previous series on the topic.
All three of these groups are starting to realize they can grow faster through a successful merger and acquisition. A process previously reserved for Wall Street types is now becoming the smart strategy to keep your business’s heart still beating.
(Photo by Rionda)
To read about mistakes to avoid when selling your printing business, download, Rock LaManna’s “12 Code Red Seller Mistakes.”
Rock LaManna provides executive coaching for printing owners looking to grow their printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan.