While many print and graphic communications companies talk vaguely about looking at merger and acquisition opportunities, very few private companies consistently maintain as prolific an M&A pipeline as NAPL member-client Kay Printing of Clifton, NJ (www.kayprinting.com).
Founder and president Richard Kirschenbaum (below, right), along with his son, Jeffrey Kirschenbaum (below, left), don't just sit back and hope the phone rings. Yes, they are "reactive" to opportunities; but they also work very hard to be "proactive" in pursuit of potential strategic transactions.
What "lessons" can be found in how Kay Printing goes about M&A?
- Cut to the Chase: One thing that they do very well is "cutting to the chase" quickly so as to minimize time invested on unrealstic candidates and habitual time wasters that dot the M&A landscape.
- Don't Stop the Pipeline to Focus on One Deal: I
sometimes see owners who put the brakes on all but one deal, which
increases their risk because if the one deal doesn't close, then they've
got to ramp up again. It's better to keep balls juggling, which is
something Kay Printing does exceptionally well.
- Treat Others With Respect: You never know how your reputation can be affected (good or bad) by how you treat others in business generally and in M&A specifically.
- Leverage Contacts: Tap into Industry Contacts Among Suppliers and Headhunters.
- Maintain NAPL Premier level Membership: Engage NAPL to manage a consistent Acquisition Outreach Program.
- Get Help: Kay has a terrific CFO on staff who helps with detailed financial analysis and Kay brings in an M&A Consultant (guess who?) to vet out candidates and to prepare Term Sheets. They use a high quality law firm when it's time to document the deal.
- Focus on Chemistry and Strategic Fit: Kay avoids
plunging into hammering out details on transations that go no where;
rather, they focus on assessing chemistry among the principals and
conceptualizing the strategic fit between the companies.
- Be Open About Financials: One could say it is easy to be open about financials when you have one of the best balance sheets in the entire printing industry. But to Richard Kirschenbaum's credit, he manages the balance sheet with great care; thus, it comes across as very unassuming when he is showing financials to prospective M&A candidates even at early stage talks.
- Don't Feel Pressured to Do a Deal: Kay Printing is cautious at how they go about M&A, and they are patient. This patience means that only a handful of M&A opportunities actually go all the way to closing. For Kay Printing, it's been 3 transactions in 5 years.
Exploring M&A is a way of life at Kay Printing.
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