Is Private Equity Right for Your Printing Company?

Private equity (PE) firms are reshaping the printing and packaging landscape. But is private equity ownership the right move for your company? Increased investor interest, fueled by resilient cash flows, industry fragmentation, and succession opportunities, has made PE a growing force in the printing industry.

NAPCO Research’s new special report, “Private Equity in Printing and Packaging: Trends, Impacts, and Strategic Considerations,” is now available for download and provides valuable insight into what’s driving this trend, what PE investors look for, and what life after a deal can look like.

Why is Private Equity Attracted to Printing?

The report examines why PE investors are attracted to the printing industry and highlights several important factors:

• Succession planning solutions: Many print business owners nearing retirement are looking for exit strategies that ensure their company continues to operate successfully. PE firms can offer a structured path to liquidity while providing leadership continuity and opportunities for management teams to stay on board.
• Consolidation opportunities: The printing industry remains highly fragmented, with thousands of small and mid-sized firms. PE firms see value in rolling up these businesses to create larger, more efficient platforms that can leverage economies of scale and improve competitiveness.
• An alternative to public capital markets: Raising capital from public markets brings scrutiny, regulatory demands, and short-term shareholder pressures. For many owners, PE presents an appealing alternative, providing needed growth capital while allowing companies to operate without the burdens of public ownership.

What Does PE Ownership Mean for You?

The report outlines how life changes for companies after a deal closes:

• PE firms generally provide capital, board-level oversight, and strategic guidance, but expect management teams to continue leading day-to-day operations.
• Decision-making shifts to emphasize data-driven performance, rigorous financial reporting, and ROI-focused investments.
• Growth strategies often shift from incremental organic growth to expansion through acquisition, leveraging PE’s capital and expertise.

What Should Owners Watch Out For?

The report emphasizes that while private equity brings opportunity, owners need to proceed carefully:

• Not all PE firms are alike: PE buyers vary widely in style and strategy. Some take a collaborative, long-term approach; others may focus on short-term returns or aggressive financial restructuring. Vetting the right partner is crucial.
• Expect ongoing involvement: Most deals aren’t “cash out and walk away.” Sellers are often expected to stay for one-to-three years post sale, helping lead the company through its next phase.
• Cultural adjustment: PE ownership brings formal oversight, data-driven decision-making, and greater accountability, a shift from entrepreneurial independence that can feel like culture shock.
• Understand deal structure complexity: Beyond the purchase price, factors like equity rollovers, earn-outs, and deferred payments can significantly affect financial outcomes and control. Owners should understand all terms, not just the top-line number.

By anticipating these dynamics, owners can prepare for a smoother transition and maximize the benefits of private equity investment.

What Are PE Firms Looking for?

Private equity investors are selective, and not every printing company is an ideal fit. The report outlines several qualities PE buyers prioritize when evaluating potential investments:

• Strong free cash flow: PE firms want businesses that generate reliable cash flow — EBITDA (earnings before interest, taxes, depreciation, and amortization) minus capital expenditures — which provides the ability to service debt and fund growth initiatives.
• A capable and committed management team: PE firms value leadership continuity. They look for management teams willing to stay on after a deal to help drive the next phase of growth, offering stability and ensuring a smoother transition.
• Modern, well-maintained equipment: Companies that have made prudent, timely investments in equipment — not too old or too new — are seen as lower-risk investments. If major equipment replacements are immediately required, that can be a red flag.
• A diversified customer base: PE investors are wary of businesses that depend too heavily on a small number of clients. Companies with a broad, stable customer base are seen as more resilient and less vulnerable to market fluctuations.

The Competitive Landscape is Shifting

As more print firms are backed by private equity, the competitive landscape is changing. PE-backed companies often benefit from scale, financial flexibility, and operational discipline — advantages that smaller independent firms may find difficult to match.

This raises critical questions for today’s print business owners:

• Could private equity help accelerate your company’s next phase of growth?
• Is private equity a solution for succession planning?
• How would PE ownership affect your company’s culture, processes, and decision-making?

Your Guide to an Evolving Market

Private equity has become a powerful force driving transformation in the printing industry, bringing both opportunity and disruption.

This report, informed by proprietary survey data and interviews with top M&A advisors, delivers expert insight into these trends — plus practical guidance for owners evaluating whether private equity is the right path forward for their business.

Download your copy today to explore the trends, impacts, and strategic considerations of private equity ownership and what it could mean for your printing company.