DeWese--Something to Say About M&A
Our industry has its own news, but it never makes the national wire. By the time you read this, more than 130 printing companies will have been acquired so far this year. That is about 30 more companies than all of 1997, and there are two months remaining in 1998. It means about $2.5 billion in sales will have changed hands the first 10 months of 1998. That's big news in the printing industry.
If you are a printing salesperson, you hear the merger and acquisition news. You hear all of the rumors as well. The rumors, incidentally, are passed along primarily by paper salespeople.
For example, if you are a printing salesperson in Baltimore, you have already heard that about five local companies doing at least $20 million have been sold this year. The same kind of news is true for many other cities.
Ask the Mañana Man
Knowing that I spend most of my time representing sellers in the printing industry, a lot of print salespeople have called me and said, "Oh mighty Mañana Man, what does all this merger and acquisition mess mean to me?" Or, "Oh all-knowing-and-seeing Mañana Man, why is this merger stuff happening to our great industry?"
I've been the investment banker to 19 selling companies so far this year, so I'll attempt to answer some of the questions that may be rattling around your heads.
The first question you ask: "Do the big consolidator companies cut sales commissions and expense accounts when they buy a company?"
The answer, so far, is, "Rarely to never." The last people the consolidators want to de-motivate are the salespeople. But don't get too comfortable. Sooner or later, as more and more companies are acquired, the financial people at the consolidator companies are going to question how much they are spending for sales compensation.