Tis the Season for Mergers and Acquisitions

Seasonality is one factor that drives the velocity of mergers and acquisitions activity among privately-owned print and graphics communications companies.

It’s fair to say that M&A activity directly correlates to family sensitivities. Holidays bring families together both literally and figuratively, and, given that at least 25% of companies in our industry are family businesses, it’s no surprise that what goes on at the dining room table ends up in the conference room six to nine months later.

Communications right after the New Year go something like this: “I’ve been thinking that this is the year to ‘do something’ with the business. My wife [substitute husband for woman-owned companies] and I talked over the holidays and it seems like this would be a good time to [take some chips off the table][slow down a little].” This begins the pathway to business valuation and exploring a potential sale or merger.

Sometimes there are frustrations about lack of progress. “Didn’t we say that LAST year was going to be the year that we would [fill in the blank]?”. The conversation then goes like this: “We need to get serious about growing the business to where we want it to be. Perhaps an outside consultant would focus us and keep us on track.”

The dark side of holidays increases angst among already-stressed family relationships. For those suffering from strained relationships, the output goes something like this: “I simply can’t work with my [brother][father][family] anymore and it’s time for one of us to go. Can you help us put together a fair deal for me to buy [him/them] out or to be bought out?”

Family sensitivities arising out of the holiday season inevitably leads to business valuations, M&A activity, and partner buy-outs. 2013 will be no exception.