The Current Pace Of M&A BY PETER J. SCHAEFER AND PAUL V. REILLY
growth between 2.5 percent and four percent this year. This doesn’t add up to a complete rebound for M&A activity, at least not right away. Many companies contin- ue to struggle, and many potential sellers, focused on re- storing their businesses to full health, have back-burnered their selling plans for now. In any case, it will be difficult to determine valuations until the market settles down and nervousness about the future subsides. Buyers Haven’t Gone Anywhere That said, owners whose print and packaging business- es came through the pandemic’s first year in reasonably good shape are still well positioned to sell on acceptable terms. This is because the buyers haven’t gone anywhere, even though they may have shifted into a lower gear for the same reasons sellers have. They still have cash, and as they scan the print and packaging segments for opportuni- ties, their motivation remains high. There are two kinds of buyers: strategic and financial. Those in the first group mostly are print and packaging firms looking to acquire other print and packaging firms for strategic reasons. These could include bringing in new volumes of business, in the form of acquired accounts, when organic growth has stalled; expanding into new geo- graphical territories; and adding technologies, products, and services that the acquiring firm does not have. Financial buyers are investors — financiers seeking a return on their investments in sectors where they see CONTINUED ON PAGE 22
Any slowdown in the pace of M&As among printing and packaging firms is only temporary. The industry is recov-
ering, buyers are flexible, and the fundamental forces that drive M&A activity are still in play. We haven’t arrived yet, but at least we know that there’s a “there” there — and that we’re closing the distance between ourselves and it. With a return to normal business The year 2020 put a serious damper on industry sales, although packaging firms generally fared bet- ter than commercial printing busi- nesses. The latest NAPCO Research/ PRINTING United Alliance COVID-19 Print Business Indicators Survey tells
Peter Schaefer
conditions in sight, we are already seeing a pickup in activ- ity for mergers and acquisitions in printing and packaging in 2021.
Paul Reilly
us that, toward the end of the year, more companies were starting to report upward trends in business activity than those reporting declines. Encouragingly, PRINTING United Alliance economists are holding to their projection of sales
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