Hyding Out

What To Look For in the Restroom of a Printing Company You May Want to Acquire

I am serious: the restroom of a printing company can give you a pretty good quick reading about the company's prospects for success. "Huh"", you ask. After having visited 100s of companies over many years, I can assure you that troubled companies tend to run out of and not replace toilet paper and hand towels. Whether this is because of the cost or simply neglect, it implies a lack of caring about the company's infrastructure. It sends the message that "we don't care" about employees or company visitors such as customers, suppliers, or lenders.

Printing companies who treat their employees and guests with such disregard as to lack toilet paper and/or hand towels are not likely to have embraced progressive organizational development practices and cultural norms conducive to success. Leading companies do not forget about restroom basics. 

Next time you visit a printing company and find no toilet paper or hand towels in the restroom, ask yourself whether this is a one time occurrence or a crack in the organizational fabric that is a window to the company's culture. Let me know what you find.

Who is Buying Printing Companies

I just spent a day with a new client who is buying a printing company. The guy in the photo who is in good shape is the client, I'm the guy next to him with the blue tie.

What makes this "news" in my little world is that this guy is coming out of corporate America. He is an "individual buyer" in a sea of "strategic buyers".

You would think that individual buyers have played a role in many of the printing industry M&A assignments that I've been involved with over the past 18 years. Actually, there's just been a handful of entrepreneurs. It's been nearly all Strategic Buyers, mostly privately-held businesses, many family-owned, who are seeking to  grow by Acquisition and/or survive by Merger.

Here's the breakdown of who has been buying printing companies:

Strategic Buyers: 95%
Individual Buyers: 2%
Financial Buyers: 2%
Not Sure: 1%

More on this topic down the road.

And the Multiple Is........

Today is the first time in over ten years that I've come across a printing company who truly deserves a Valuation multiple higher than 5X EBITDA. That's because it really isn't a printing company although they do print and mail as part of their business. Hear me: "PART OF" their business. This NAPL member has such a unique service offering and set of capabilities that I don't even want to remotely describe it in a blog. But trust me when I say that the key to the kingdom is the customer "hook" which is way beyond the usual trio of price-quality-service. Those are a given these days.

More on valuation and multiples in future blogs. Have a great day.

Why Printers Should Care About Bain Capital vs Banks

Did you see that the banks are being sued by the private equity guys in the Wall St deal involving Clear Channel Communications? This is HUGE for owners of printing companies.

"Huh?", you say.

Owners of printing companies need to be on red alert for signs that their bank is putting the screws to them due to the credit crunch. There is no better barometer of the existence of the credit crunch than having the glamour boys of private equity (Bain and Thomas Lee) having to litigate against the very same banks that just 6 months ago were desperate to do business with them!

Be on alert for subtle changes in tone and body language in dealing with your bank. If in doubt, just give me a shout. I'll set you straight on how to interpret the bank's actions and what to do about it.

On the Road Again

John is in Paramus today, but that's a rarity.  More often than not, he's on the road, at a client's office, and working hard to help them be as successful as possible.  When out and about, he not only brings his expertise to bear on behalf of the client, but learns about what's really going on in the world at large. It's that kind of commitment and street smarts that differentiates NAPL consultants from many others. It's also part of the NAPL philosophy -- to share learning and grow together for a stronger industry overall.   It's why he's started this blog, and why we hope you'll take the time to share and comment as well as follow what's happening around the country.