Consolidation--Moguls of M&A
Mays: We use a variety of measurements to value the company: financial, operational and market. Our program measures and grades each area using a weighted factor. We price a deal using a multiple of EBITDA. It is not the only measure, but has become an industry standard.
PI: How much cost savings does your company bring to an acquisition after buying it, and in what areas (paper, consumables and equipment)?
Mays: How much cost savings can depend on the state of the firm when we acquire it. We do look to save on the cost side, leveraging our financial, purchasing and operational capabilities. In addition, we look to grow the company, thereby maximizing capacity and scale, and increasing profits.
PI: What percentage of company presidents have stayed on after the acquisition?
Mays: One-hundred percent. We look to have key management stay on to participate in the company's growth. If the company has a strong management team and the president desires an exit, we will structure a plan to phase the transition or succession.
What is the ultimate objective; where are you taking these companies, direction-wise?
Mays: We are looking to create a global graphic communications firm, serving major corporate clients in major markets. We use the diversity of our geographic locations and services to provide a one-stop, distribute-and-print service to our clients.
Printing Arts America (PAA)
Terry Tevis, president and CEO
THE privately-held Westport, CT-based company does not disclose consolidation price figures, but there is little doubt to its status as a major player in the realm of acquisitions. Printing Arts America has acquired 10 companies in the past 15 months and has watched its overall sales climb to $200,000,000.
PI: What types of companies are targeted?
Tevis: We continue to buy companies that are located and compete in one of the 26 major markets. With 85 percent of the population in these markets, it enables the PAA divisions to compete in a robust environment where the company can gain share at the expense of less market-driven competitors.