Growing Opportunities with Mergers and Acquisitions

Written by Howard Fenton
Senior Technology Consultant, NAPL

business meetingTwo ways that companies expand is through organic growth and inorganic growth. Organic growth refers to increasing sales with your existing sales and marketing efforts as opposed to inorganic growth, which results from merger or acquisition (M&A) activities. M & A opportunities come in different shapes and sizes and one that remains popular is known as the “tuck in” which buys a book of business from another company and “tucks it into” your company.
Over the last couple of years M&A activities have experienced ups and downs much like the economy, but often in opposite directions. However, some people are starting to talk about an approaching increase or spike in activity, which is good news for those considering M&A.
Of course no one knows for sure how and why increases these spikes occur.
Everyone has their own unique perspectives and anecdotal evidence. One member of our consulting team talks about increases after the holidays when all the members of a family owned business sit down together for dinner. The only thing we know for sure is that
it’s been a while since there was a flurry of activity. In the printing industry, the last spike in activity was the 2004 increase in a number of “tuck ins” and prior to that was the 1998 increase in the number of deals. Some might say that it’s due.
According to CPA Practice Advisor in the second half of 2013 mergers and acquisitions will increase 40%. Although not industry specific, this was based on 1200 professionals across a variety of different industries. The obvious question is what is going to drive M&A in our industry?
First, despite the maddeningly slow recovery, many companies are reporting that overall their business is improving and they are continuing to hold the reins on their costs. Of course, healthier companies means companies that are more attractive prospects. On the other hand, the long recovery is frustrating many owners who have been patiently waiting for years for the right time to exit. Many of these owners tell us they would prefer to wait but are growing weary.
As a result there is increasing interest in M&A activity. According to recent NAPL research, almost a third of the companies surveyed plan to pursue M&A options. The number of companies considering M&A is up sharply from 23% two years ago and 11% five years ago.
Are you prepared?
If you are considering an exit strategy or are becoming a healthier prospect then you should consider attending one of the two NAPL Advanced M&A Strategies workshops this fall.
The first date is rapidly approaching and the location is very convenient. The date is Saturday, September 7th which falls on the weekend before the Print 13 Show and the location is Chicago. The date of the second workshop is November 14th at the Xerox Gil Hatch Center in Rochester, New York.
What can you expect in an advanced M&A Strategy workshop? In addition to detailed strategies and case histories from industry executives who have been through the process, the workshop will also discuss NAPL’s latest research on how leading companies succeed with M&A. The presentation will answer questions about financing, debt, working with your bank, and how to value a business. As a bonus, those who attend will receive a free copy of the book, “Strategic Growth: The NAPL help guide to Mergers and Acquisitions” and the NAPL research study, “Mergers and acquisitions: a Growing Strategy for an Industry in Transition.”
For more information about these  upcoming M&A workshops, click this link.
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Howie Fenton is a consultant and business advisor at NAPL as well as a paid contributor to this blog. Howie advises commercial printers and in-plants on benchmarking performance against industry leaders, increasing productivity, and adding digital and value services through customer research. For more information click here.

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