Ready to Sell or Not—Not!
It’s been a long road to get here, but we’ve finally arrived at a point where we can state it for the record: M&A opportunities for printing and packaging businesses are better than they’ve been in years.
EBITDA multiples—a key determinant of a company’s selling price—now range from three to five for commercial printing businesses and from six to seven-plus for packaging printers. These are big gains from where the multiples stood just 18 months ago. We’re also seeing fresh interest on the part of individual and corporate equity players who previously steered clear of any investment linked to printing.
In short, it’s a great time to sell a printing or a packaging business. But, as favorable as market conditions may be, is it your time?
The biggest underlying question is how attractive your company will be as an acquisition target, and we’ll come back to that in a moment. There are a number of other things to consider before you hang out the “for sale” sign:
Is the actual value of your company what you want it to be? A gap may exist between a seller’s expectations and the number that a formal valuation will yield. Be realistic here.
What do you intend to do with yourself after you sell? Very often, owners who have spent most of their adult lives building up a business can’t readily answer this vital personal question. Don’t proceed until you can.
Would you be willing to stay on as an employee of the new owner for a period of time? Buyers want continuity of executive management for one to three years. Is this role, would you remain comfortable playing post-sale, when you are no longer the boss?
Could you get a higher return by selling parts of the business separately as opposed to selling everything at once? Some owners find they can come out ahead by liquidating gradually: a building, an operating center, a division in another geographical area.
Frank D. Steenburgh, partner at New Direction Partners, brings over 45 years of industry experience, including the past 30 years in digital and is internationally recognized as an expert in digital printing and publishing. His experience includes corporate officer at Xerox and president of Indigo’s Americas operations. Frank’s value includes a wealth of global industry contacts, a proven track record in development and implementation of business strategies that drive revenue/profit growth and a deep understanding of horizontal and vertical markets. Contact him at (610) 230-0635, ext. 709.