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Colville Helps CGX Compete On M&A Circuit --Cagle

April 2002

A former first-round pick out of Texas Tech, the return of Colville (OK, no more sports references) creates a buzz of excitement in the industry and, undoubtably, in the CGX war room. Frankly, consolidation within the commercial printing industry has been relegated to mostly small deals—companies pulling together to better weather the economic storm.

The big boys of consolidation haven't been so big in the last 12 to 18 months. It isn't all their fault, but the recession can't be used as a crutch. A lot of valuation multiples and dotcom lessons were learned from the heady days of 1998 and 1999, and some of those wounds have yet to heal. The capital venturists have moved down the line and the investment bankers now have more brains than money.

Mañana Man

As M&A specialist Harris DeWese has more eloquently put it, it's not the consolidation model that's flawed; rather it's the people making the key decisions who are. DeWese helped us put together a Top 10 list of industry leadership candidates (Colville, of course, was on there) for our regular February issue and his lone regret is that we could not run a flipside list, a Bottom 10. It would have been amusing, only to help further illustrate how often good managerial qualities are overlooked in the graphic arts industry.

"I honestly felt, at some point, Chris would return to the printing industry and eventually be the president of some company," DeWese says. "Chris is a deal-maker—intelligent and methodical. He knows M&A about as well as anybody I know."

Colville was a natural choice for CGX to strengthen its senior management team, DeWese adds. The statement CGX makes with the move is obvious—the M&A climate is becoming favorable. Like the aforementioned sport, M&A is a game not everyone can play well enough to make a living.

"It depends on who has the strong balance sheets," Colville explains. "There aren't too many companies that have them. Consolidated Graphics is one, Moore is another. The companies that have good balance sheets now are fewer than the amount when I left Consolidated Graphics (in 2000).

"The recession has taken a lot of steam out of acquisition multiples," Colville adds. "There will be a lot more M&A activity in the near future, but it will be concentrated among a smaller group of companies."

Optimism is truly everywhere.

By Erik Cagle
 

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