INDUSTRY CONSOLIDATORS -- Economy Ends M&A Frenzy
Reilly: We should start to see some improvement in the valuation of printing companies after the slowdown in printing that is affected by the recession ends. Then, we'll see some improvement in the valuation of printing stocks.
Davis: For us or another company to begin making printing company acquisitions, it has to be an attractive investment—a good use of our money. With the prices coming down on individual printing companies, we will probably be making some acquisitions in the next three, six, 12, or 18 months.
PI: Does the current condition of the economy make shareholders weary of consolidation moves right now?
Norton: The current uncertainty in the economy should concern every business person, including consolidators and their shareholders.
Jensen: Shareholders are always looking for an economic opportunity, regardless of the state of the economy. To the extent a consolidation makes economic sense, and assuming the availability of equity and debt financing, consolidation will continue at some level.
Reilly: I think there is little doubt about that. In an economic downturn there is always a very viable request by shareholders to be husbanding cash more than they would during growth periods. It is a very natural reaction in this environment.
Davis: I think the condition of the economy concerns everybody. I am more worried about running a company, what impact the economy is going to have on our company today and the impact it will have on any company that we are acquiring. Certainly the economy is a concern to all of us.
PI: How are you integrating the companies that you have already acquired?
Norton: Nationwide is integrating the companies it acquired in the past by standardizing their accounting charts of accounts, installing costing systems that are compatible, standardizing personnel policies and manuals, and having various division presidents visit some of the weaker divisions for the implementation of best practices.