Recently, I took part in an M&A Q&A that was part of a print industry article. I pulled no punches and called it as I see it, as far as mergers and acquisitions go. Below, you'll find the questions and my answers.
How would you currently describe the consolidation/M&A landscape in the print industry?
It's not quite the Gold Rush but there's a lot of activity. If you're an experienced buyer, who knows the M&A game, printing is very attractive. But to be successful, you need to be a strategic, long-term thinker.
What's changing/different than recent years, if anything?
Global investors walk into the marketplace with fistfuls of cash. They are looking for print organizations that have reliable and believable historic pre-tax profits and sales growth forecasts.
Growth is a big part of the M&A crowd's strategy. They want print and print related segments that can grow quickly, producing sales and profits. There's also an understanding that you must have talented professional print managers to power the engine of growth.
What are the primary benefits of of merging with another company?
Hope! The hope is that you'll be dancing with a partner who will make you better. The tricky part is that the two parties need to share a vision, a commitment to execution, and have the right combination of people, strategy, and cash. This is why we don't see a lot of mergers in today's world. It's a complex process, like taking two workhorses and producing a thoroughbred.
How do smaller companies benefit from joining larger companies, and vice versa?
The smaller seller hopes to give its customers, employees and suppliers a sustainable solution and brighter future. The larger company needs someone to help it cross the finish line to better sales and profits. It knows how to run the race but wants to get faster.
What's one thing a smaller print company should be aware of that they might not be in this field?
Ask for help, pray for patience, and always pay attention to your revenue stream.
What are some mistakes business owners might make during the M&A process that can be avoided with the right knowledge?
Business owners must understand that experienced buyers don't make mistakes. They are professional investors who understand long-term strategy and the importance of having the right people to execute a vision.
And while they've got cash, they are also the masters of buying high potential, low-risk investments at a discount. Their average day is the seller's biggest deal of his or her life.
Many deals fail due to lack of the sell side team of advisors, knowledge and experience with the M&A game. It takes preparation, talent, experience and confidence to smartly negotiate at the deal maker's table.
Bottom line - it's a math game - be knowledgeable of the M&A process and it's rules. A good sale can be a great time if it's done right.
About The LaManna Alliance
The LaManna Alliance empowers owners and CEOs as they transition into buying, building, and selling printing and print-related businesses. With 35 years of print industry experience Rock LaManna understands the challenges that keep you up at night. He's where you go to grow!
From valuations to retirement and succession strategies, he knows the important steps you must take to maximize your future. All conversations are confidential and are based on integrity and trust. For more visit: www.RockLaManna.com.