Rising Interest in M&A
If NAPL State of the Industry participants are any indication, there’s a rising interest in M&A among printing companies. When asked about their plans to grow revenue, slightly more than 30.0% cited mergers and acquisitions. This is up sharply from 22.6% two years ago and 10.9% five years ago. Given our industry’s challenges, the increase shouldn’t be all that surprising. Since peaking at $101.1 billion in 2000, commercial printing industry sales (all sources, not just print) have fallen more than 20.0%. A growing number of printing company owners and executives are recognizing that even a healthy economy doesn’t create enough organic growth for everyone anymore, and that the time for a “build it and they will come” approach to business has long past.
Nonetheless, the fact that interest in M&A is on the rise is just part of the story. It doesn’t tell us about companies’ experiences, nor does it tell us about their M&A goals or apprehensions. The NAPL Mergers and Acquisitions Survey was designed to fill these and other gaps. Survey results showed that almost three-fourths (74.7%) pursued M&A to expand within markets they are already serving, and nearly three out of five companies (57.8%) aimed to fill capacity on existing equipment. The most frequently cited factor why some companies haven’t gone down the M&A road: We’ve done well on our own (81.0%). But even the companies with reservations indicated they have an open mind and would consider M&A for the right reasons.
Source: NAPL Mergers & Acquisitions While Paper, to be published March 2013.
As participants in our study agree, M&A is a complex, multi-dimensional process with many surprises. The risk can never be totally eliminated. But it can be reduced by preparing thoroughly and learning from transactions—whether completed or not. Subsequent posts will discuss to what extent companies’ expectations were met, as well as some of the roadblocks to successful M&A and how companies overcame them. Survey results and analysis will be more fully discussed in an upcoming NAPL Mergers & Acquisitions White Paper.
Andy Paparozzi Joe Vincenzino