Mergers and Acquisitions — Deals That Make Sense

“Some people don’t realize the industry is so huge and fragmented, and that there are so many different segments,” he says. “Just because one area isn’t successful, it doesn’t mean that the overall situation is bleak. People sometimes look at it that way, especially from a financing side.

“Banks are becoming more interested in making sure that they’re going to be able to finance a deal in such a way that there’s less risk. Less risk means less volatility in month-to-month sales. In certain segments, that could come back to haunt us,” Cronin concludes. PI

Flip This Company

Harris DeWese, chairman and CEO of Compass Capital Partners, offers a list of suggestions for those companies that are seeking to put themselves on the market. Before you hang that theoretical “for sale” sign, it behooves you to bear the following in mind:

• Make sure your financials are pristine; if not, be prepared to document any unpleasantness.

• The best candidates for sale have a diversified client base. One account that monopolizes production, or a customer that accounts for 40 percent of overall business, will send up a red flag to potential buyers.

• Undoubtably, 2007 will be remembered as the year of FSC certification. Think green, think environment, and make sure your policies jibe with today’s accepted standards.

• If you have skeletons in the closet and are facing litigation, it’s probably not the ideal time to sell.

• A printer is like a baseball team—its success hinging on the ability of individual stars to perform and the team to come together and play as a unit. And no one wants to take over a ballclub that’s going to lose a boatload of free agents. Likewise, a viable acquisition candidate should have a sales and managerial force willing to stay on board.