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  • Transition from Ownership: 3 Key Learning Points from the NAPL-NAQP Owners Conference
    By John Hyde - Friday October 19, 2012
    Attendees at the recent NAPL-NAQP Owners Conference exchanged ideas/perspectives on industry trends and issues including strategies for transitioning from ownership. Here are 3 key learning points that received attention among participants: 1. The M&A marketplace for quick and small commercial printing companies is robust, perhaps more so than other segments of the overall graphics communications industry. This is primarily due to buyers sourced by national franchise systems such as Allegra and Alphagraphics, both of whom have clearly demonstrated prowess in finding M&A opportunities for their franchisees. 2. Transitioning from ownership where the business is sold "in pieces" rather than as a "going concern" has become more accepted...

  • Graph Expo Then and Now
    By John Hyde - Monday October 15, 2012
    It never seems old to visit Graph Expo, but this year's show reinforces significant trends and highlights the difference from "then" to "now." Overall, the show remains highly relevant to business owners who are seeking ideas, insights, and perspective. While technology and production equipment dominate the landscape, in some ways the show has morphed from "product"-orientation to giant peer group, a place for the industry to reflect and reinvigorate. Size: Graph Expo 2012 is a fraction of the size of its predecessor from five years ago, easily captured on foot with one full day or at most two which makes it enticing for owners who can't get away for big blocks of time. Graph Expo 2000 would dwarf the current incarnation, as it used to...

  • What You Need to Know About Antitrust Law and Printing Industry M&A
    By John Hyde - Thursday October 4, 2012
    Given the substantial M&A activity that defines the landscape of the print and graphics communications industry, it's interesting to note that very few strategic acquisitions in recent years have triggered any antitrust concerns. Why do the regulators appear to be sitting it out on the sidelines while our industry is undergoing long-term consolidation? According to legal expert James Burns of Dickinson Wright PLLC (Washington, DC), who leads the firm’s M&A antitrust practice, merging parties typically do not need to obtain federal regulatory approval for transactions that are valued below $68 million, and most regulatory review occurs on deals that require pre-approval. While regulators can review transactions below this reporting...

  • Succession Planning Overview for Owners of Print and Graphics Communications Companies
    By John Hyde - Wednesday September 5, 2012
    Succession planning is a huge challenge facing owners in the printing and graphics communications industry, and, as head of the NAPL Mergers and Acquisitions advisory team, it’s an issue that comes through our offices at NAPL on a frequent basis, but in a context that some may consider surprising. Family-owned small businesses dominate the landscape of the printing and graphics communications industry. Many were founded by veterans in the post World War II era or by their baby boomer children. The next generation can be found in numerous companies that have been reinvented as the industry is being “redefined” (borrowing the phrase from my NAPL colleague, Andy Paparozzi). For these folks, succession planning is often the elephant...

  • Advice on Debt Financing for Growth
    By John Hyde - Tuesday August 21, 2012
    Debt financing for the five 10 percent of print and graphics communications companies that are growing is not overly difficult to obtain in the current climate (summer, 2012). Banks, leasing companies, and asset-based lenders all have their doors open for good borrowers. This means that owners are "doing it themselves" without outside assistance from consultants. When the owners of an NAPL client sought our input on their proposed financing last week, it occurred to me that some of these points may be relevant to other NAPL member-clients. The following eight points are only applicable to "healthy" companies seeking financing to support customer growth; they are not applicable to "turnaround" situations or for cases in which equity...

  • Recommended Key Points for "Second M&A Date" Involving Two "Treading Water" West Coast Companies
    By John Hyde - Monday August 13, 2012
    By John Hyde An NAPL client on the West Coast is in "early stage" discussions with another print and graphics communications company about a possible strategic acquisition. Semantics about "acquisition" or "merger" are familiar terrain for these kind of exploratory talks, but both companies are "treading water", so the question of "who is buying who" is the 800-pound gorilla in the room. The first introduction via phone went well, and the parties are planning to meet in person as a "second date". I've been asked to provide "talking points" to help the client prepare. Here are my suggestions for this situation: "The most important outcome from this "Second Date" meeting is to gain better understanding of consolidation savings and...

  • 6 Key Considerations in Defining Compensation for Former Owner Who Becomes Part of the Acquirer's Organization
    By John Hyde - Friday July 6, 2012
    By John Hyde A critical component of many M&A transactions in the printing and graphics communications industry is to define the role/compensation for the former owner(s) who is becoming part of the acquiring company. I'm not referring to the so-called "transition period." Rather, I am referncing the numerous cases in which the former owner or the partners are becoming valued employees of the acquiring company, whether in sales, operations, finance, etc. My perspective is that the compensation needs to reflect these 6 considerations: Affordability Fair market rate for services regardless of ownership or employee status Incentive and upside opportunity Lifestyle (what has he or she become accustomed to, including the value...

  • How Business Valuation Becomes an M&A Offer
    By John Hyde - Thursday June 21, 2012
    As an M&A advisor to owners and senior managers of print and graphics communications companies, I'm often asked how we come up with an offer. In other words, how does a business valuation translate into "price" and "structure" in the Term Sheet stage of the process? My colleagues and I at the NAPL M&A Advisory team usually start an assessment with the NAPL "State of the Industry Report" which is even more important than the financial statements. Simply, is the company a "leader" (as defined in Andy Paparozzi's research) or is it "treading water" or just being "milked"? You probably know by now that a high "price" and favorable "structure" with mostly cash at closing is reserved for "leaders." From an analysis perspective, we value the...

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