Mergers & Acquisitions

You shouldn’t think about “campaigning” in the M&A marketplace unless, and until, you have a firm handle on your company’s valuation. New Direction Partners has performed more valuations in the printing industry than any other consultancy, and that experience has taught us to identify a number of factors that enhance a company’s value.

What determines your strategy for an acquisition? There are as many situation-specific answers as there are printing companies, but our buying clients at New Direction Partners usually have one or more of the following objectives in mind. Some are more relevant to tuck-ins (where only customer accounts are acquired) than to sales as going concerns, and vice versa. But, they’re all good examples of good reasons to proceed.

It’s possible to muddle along without a written business plan, and unfortunately, that’s what many printing companies do. But, at the M&A stage—a stage that New Direction Partners believes all printing companies will reach eventually—the absence of a business plan makes it all but impossible to move forward with a deal.

There are plenty of good things to say about pride. After all, it’s one of the noble impulses that gets us out of bed in the morning and motivates us to do the best job we can for our customers, employees, and others who depend on us. But when it makes anyone resist the idea that today, every print company owner should be preparing either to acquire or to be acquired, it becomes something else. Steer clear of the trap it can set for your business when your moment of truth arrives.

As we discussed in the first installment of this series, the pace of mergers and acquisitions among printing and packaging firms finally is on the rise after years of languishing in the doldrums. That means there's heightened interest in finding out what companies are worth and in determining what kinds of deals can be structured around these valuations.

New Direction Partners, the leading M&A advisory firm serving the printing and packaging industries, and North American Publishing Co.’s Printing Impressions Group, which comprises Printing Impressions, packagePrinting and In-plant Graphics brands, have announced a new, multi-channel partnership to educate print professionals about the current industry M&A landscape, as well as to serve as a conduit for specific transaction opportunities.

In M&As, good faith is everything, and it begins with your everyday outreach to the people who work for you. Keep on finding opportunities to let them know that you value their contributions and that you have their backs today and in the long term. That way, when the time comes to share your plans with the workforce as a whole, the things you’ll want to say most will go without saying.

Selling a printing or a packaging company is complex. Deciding to sell a printing or a packaging company is complicated. The difference? Selling is a straightforward business process with clear-cut steps and rules. Deciding to sell, on the other hand, is a deep dive into the psyche of the seller. For first-time sellers, it can be uncharted territory.

Once upon a time, printing and packaging could get by without being data-driven, and so could M&As. This was because in those days, a lot of dealmaking took place locally. If you were a printer in Rochester, NY, for example, you probably knew personally all of the likely candidates in the Rochester area. If you were an M&A consultant, a well-thumbed Rolodex was your most frequently used tool. Personal relationships are still important in M&As, but the geography is bigger.

If you've decided to grow your business by acquisition, it follows that you're thinking like a buyer. But, can you think like a seller as well? You'll need to move nimbly from one mindset to another as you strategize the purchase that you want to make. Your own goals will be clear enough, but it will be harder to attain them if you can't also inject yourself into the thought process on the seller's end.