Hyding Out

"Selective Default" Makes Headlines in Washington

Printing company owners can teach Washington a thing or two about "selective default." All the talk about the federal government paying some debts on time while going slow on others makes headlines but isn't that just normal life in our industry? Even leading companies sometimes pay their bank loans when due but temporarily defer some debt obligations when cash is tight. I suppose Xerox, HP, Kodak and other printing industry creditors can now add the phrase "selective default" to the lexicon of equipment lease restructuring. Watch for it soon, I guarantee lenders will pick up on it.

M&A is More Out in the Open; But Owners Must Avoid the "Time Waster" Label

As the print and graphics communications industry consolidates, literally hundreds of owner to owner conversations take place every day about possible mergers, acquisitions, and partnerships. Two stark realities have emerged amidst this sea of boiling water:

1. M&A is out in the open, no longer the subject of "hushed tones" conversations in window-less rooms; and

2. The "Time Waster" label is nearly fatal for owners seeking to engage in dialogue with their peers in M&A exploration

A brief journey down memory lane: when I merged my consulting practice, Rampart Associates LLC, into NAPL in early 2004, very few owners were seriously engaged in exploring M&A "on purpose, all the time". The leading companies surely embraced the idea of proactive, "Growth by Acquistiion" programs, but over the past seven years, M&A has grown in popularity among entrepreneurial and family businesses, and it is just considered another normal way of growing revenues, whether your company is a "leader" or "treading water".

As a result of this, M&A is less taboo, more widely accepted, and owners need not conduct meetings in the shadows.

The "Time Waster" label applies to owners who habitually respond to each and every M&A inquiry, almost as if afraid to miss an invitation to the school dance. The problem is that some of these folks are "just fishing", or seeking business intelligence, as opposed to engaging in substantive dialogue. The "Time Waster" is known for endless meetings, extended courtships, frequent stops and starts, and disconnected thinking. Seasoned owners smell the "Time Waster" a mile away. A reputation for being in the "Time Waster" category seriously undermines an owner's ability to navigate M&A opportuniteis. 

To avoid the risk of being declared a "Time Waster," an owner called my NAPL colleague Kathleen Appleton earlier this week and said, "I need to cancel the meeting with [NAME WITHHELD] because my family and I are only 10% certain we want to go through to the end result. We had been 40% certain when we scheduled the meeting, but the timing just doesn't seem right and we don't want to be known as a company who will waste your time or that of another owner."

Kathleen and I assured this owner that his forthright communication was well received by our client and by us, meaning, there is no negative ramification for terminating the M&A exploration process at this early stage. For this assute owner, the "Time Waster" designation will not apply, and he is welcome to engage in further dialogue when he feels it is appropriate to do so.