The COVID-19 pandemic will continue to have a bearing on mergers and acquisitions among printing and packaging companies as we enter 2021. But, the virus won’t be making the deals. Smart owners will, and with realism and flexibility, the deals can be as good as any in a normal year.
James A. Russell
A plain truth for our commercial printing clients is that a company’s valuation is directly linked to its investment in technology. We think that investment in technology is just as crucial for producers of labels and packaging, but we wonder if the message is being heard clearly enough.
Executing due diligence the right way means drilling down into every layer of the business being acquired, with no room for guesswork or assumptions.
No sale can succeed for the seller without a clear-eyed understanding of what the business is really — meaning really — worth. Here’s a primer on this essential subject.
It’s an appeal for help that we’ve grown accustomed to hearing at New Direction Partners: “My sales are flat. We aren’t moving in the right direction as a business. I know I should be thinking about acquiring another company — but what kind of company, and how?”
At New Direction Partners, we often advise selling owners of printing businesses to be prepared to stay on in one role or another after the transaction closes. Because keeping a hand in the business at the new owner’s request is a given in so many deals, it’s helpful to have some idea of what the responsibility is going to entail.
Do you, as the owner of a printing business, have a plan for no longer being the owner of that business?
As businesspeople, we always try to base our decisions on facts, numbers and logic. But, as ordinary humans, we also operate on emotion and instinct. In the year we’ve just entered, we should have plenty of opportunity to display both kinds of behavior.
Identifying a target for an M&A transaction is a mostly straightforward exercise. Buyers pick companies to acquire by first defining what they want the acquisition to accomplish. For sellers, finding appropriate buyers can be a bit more open-ended — but still achievable with the help of sound professional advice.
As printers continue to seek out new, profitable production methods, wide-format printing has emerged as an attractive growth market. New Direction Partners explains why this is a market segment worth exploring.
Joint owners will have a little more planning to do in order to be ready for the eventual sale of their company. They’ll need to understand each other’s personal objectives and, once they have that understanding, give themselves time to structure and execute a sale that satisfies everyone.
There is no better feeling in business than coming to the end of a good year with the wind still at your back for another one. It’s a pleasure to be able to sum up 2015 in this way as we review how the year played out for mergers and acquisitions among printing and packaging companies.
As the owner of a printing or a packaging business, you probably think of yourself as a pretty effective negotiator—and you probably are correct. Skill in negotiating is, after all, a hallmark of the leader of any successful business.