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CGX's M&A Criteria -- Wanted: Industry Leaders

October 2008 By Jim Cohen
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. 

This company was attractive to us because it was highly profitable and operated in a niche (large-format packaging and POP), which we knew would be attractive to our 650 salespeople and 22,000 customers. It also isn't a cliché to say that it's all about management. With the Birds, for example, I knew early on that the cultural fit was ideal. 

In the case of the Hennegan acquisition, I first reached out to the Ott family soon after I started at Consolidated Graphics because it didn't take long for me to figure out that they were running one of the highest quality printing companies in the United States (500-line screen, anyone?). What I really liked about Hennegan, aside from their stellar reputation and first-class customer base, was the fact that it was founded in 1886 and was being run by the fourth generation (Bob Ott Jr.). 

 

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