Beyond EBITDA: A Printing M&A Bootcamp

As M&A continues to be a major trend in our industry, Mark Hahn of Graphic Arts Advisors opened a value assessment bootcamp for printing and graphic communications owners at the 2025 PRINTING United Expo.

The session had a simple premise: value is not a single number, and it’s rarely as straightforward as “a multiple of Earnings Before Interest, Taxes, and Amortization (EBITDA). Throughout his session, Hahn helped break down how buyers and sellers arrive at price — and, more importantly, how much a selling shareholder actually takes home.

“The true discussion when you get down to your value assessment and what your net shareholder proceeds are going to be is a much more nuanced conversation than just your EBITDA," Hahn said.

Hahn outlined three common valuation approaches:

• The cost approach: This asks what it would cost to replace the assets (similar to valuing a house by rebuild cost).
• The market approach: This looks for comparable transactions—difficult in printing because companies vary widely by size, mix, and profitability.
• The cash flow/income approach: The most common in M&A, this is often expressed as a multiple of EBITDA. He also reviewed valuation “levels,” ranging from fair market value (highest for profitable going concerns) to orderly liquidation, forced liquidation, and scrap—emphasizing that a company can be profitable yet still be worth more “in pieces” depending on circumstances.

A key distinction emerged early: enterprise value versus net shareholder value. Owners often quote enterprise value “I’m worth four times EBITDA”—but what matters is what remains after debt and other obligations.

 "Everybody wants to know what is my company worth? They might say 'I'm worth five times my EBITDA, what's my company worth?' But really what most owners want to know is the net shareholder value," Hahn said. "Say you have a value of $10 million in your company, but you owe $9 million of debt. Your shareholder value is only a million dollars."

While EBITDA is widely used because it standardizes companies with different depreciation schedules and enables faster comparisons than full discounted cash flow modeling, Hahn argued it’s frequently misunderstood. The real work is in refining EBITDA through adjustments  or “add-backs” as he referred tot them, and interpreting what those numbers mean to sophisticated buyers.

He walked through typical add-backs such as auto expenses, certain insurance categories, excess owner compensation, and discretionary spending buried in marketing or “other” lines. The important nuance: owners cannot simply add back their full salary. In most cases, the add-back is the difference between what the owner is paid and what it would cost to hire a market-rate replacement. Rent can also cut both ways: under-market rent may reduce EBITDA rather than increase it, because a buyer normalizes real estate costs.

Hahn stressed that add-backs must be defensible.

"I can tell you that if you're selling your company and you tell us I've got $100,000 of owner add-backs that I have sprinkled into my P&l. That's fine at the beginning of this process, but when you get down to the sale process, especially if you're dealing with a sophisticated buyer such as a PE backed firm or a PE fund itself, or a large company, they're gonna dig in really deep to those details and they're gonna want documentation of those add backs," Hahn said.

From there, the session moved to the most common “surprise” in deal economics: working capital. Buyers typically value companies on a cash-free, debt-free basis, expecting three things:

(1) Assets free of equipment debt.

(2) Intangible assets (brand, customer data, records, relationships).

(3) A normalized level of net working capital — generally accounts receivable, inventory/WIP, and prepaid expenses minus accounts payable and accruals, excluding cash and short-term debt.

This expectation can materially affect proceeds, and it often trips up sellers who assume they’ll keep receivables or draw down payables right before closing.

To manage that tension, deals use a working capital “peg”—a pre-agreed target based on trailing performance (often a 12-month lookback to smooth seasonality). At closing, the purchase price is adjusted dollar-for-dollar based on whether working capital delivered is above or below the peg. Hahn explained the human nature behind it: sellers would prefer to collect receivables and delay payables; buyers would prefer the opposite. The peg creates a neutral standard.

Hahn then introduced a second valuation lens that is increasingly relevant in today’s consolidation-heavy market: the asset-based/tuck-in valuation for distressed or near-zero EBITDA businesses. He offered a familiar scenario: a $10 million printer with strong margins can quickly lose key accounts and drop to $6 million in revenue with zero EBITDA—yet it is not “worth zero.” In such cases, value may be better captured by combining the orderly liquidation value of equipment with the value of the book of business (intangible assets), often sold as a tuck-in to another platform.

Graphic Arts Advisors has developed models to value that book of business based on contribution margin, sales costs that must transfer, and a projected attrition rate—recognizing that retention is the make-or-break variable. These deals are frequently structured with earn-outs, though Hahn noted the market has improved from the post–Great Recession era, when distressed tuck-ins sometimes yielded little or no upfront cash.

In comparing the EBITDA-based and asset-based methods, Hahn highlighted a useful diagnostic: if an EBITDA valuation is much higher than asset value, the company is using invested capital well. If asset value is higher than the EBITDA multiple suggests, the business may be underutilizing its capital base. When both methods converge, it can indicate a “normal” operating company—but he cautioned that tuck-ins are riskier, with more earn-outs and greater customer-loss exposure, so a going-concern sale is typically preferable when feasible.

He closed with marketplace observations: a steady stream of tuck-ins continues as owners age out, succession fails, and some businesses face losses or real estate-driven exits. He also warned buyers about successor liability risk when acquiring distressed operations, urging careful transaction structuring.

Finally, Hahn summarized the “nuance” behind valuation multiples through his “keys of value”: growth trends, margin quality, customer concentration (ideally no more than 10% per customer), documented recurring revenue, specialization and barriers to entry, strong records and consistency, minimized owner dependence, and “off-balance-sheet” risks such as union pension exposure or contract cancellation fees.

The takeaway for wide-format and commercial printing leaders: valuation is a system of interlocking levers, and owners who understand EBITDA adjustments, working capital mechanics, capital expenditure needs, and deal structure are better positioned to maximize true net proceeds — not just headline multiples.