CGX’s M&A Criteria — Wanted: Industry Leaders
LAST MONTH marked my third anniversary heading up mergers and acquisitions at Consolidated Graphics (CGX), and it feels like three months instead of three years. This may be due partly to the fact that we have been very busy on the M&A front. For example, in the last year and a half alone, we have acquired companies with more than $320 million in revenues, increasing sales at Consolidated Graphics by 33 percent during this period. And what is most exciting about all of this activity is that we have maintained our traditional discipline and have only acquired commercial printing companies that are generally recognized as industry leaders: Annan & Bird, The Hennegan Co., Pikes Peak Lithographing, Cyril-Scott Co. and PBM Graphics, for example.
My goal has been to identify the best companies and proactively approach them, but I also learn of opportunities through intermediaries or directly from the owners themselves (there is an e-mail link to the M&A team from our Website).
The purpose of this article is to shed some light on what Consolidated Graphics looks for in acquisition candidates. But before I describe the generic characteristics of attractive printing companies, it will be helpful to first share a little background on some of our recent acquisitions because these companies share many of the characteristics that we look for generally.
In the case of Annan & Bird, for example, in Toronto, I had heard good things about their large-format capabilities. I was in Toronto looking at another business and decided to call John and Dave Bird, the two brothers running the business who also represent the second generation of owners. Annan & Bird does high-quality packaging and point-of-purchase, large-format printing on five presses ranging from 57? all the way up to 81?. Interestingly, for a Consolidated Graphics company, they don’t even own a 40? press.