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Printing And Packaging Industry, Mergers And Acquisitions Continued To Heat Up Nov 17, 2017

In the United States printing and packaging industry mergers and acquisitions continue to heat up the moment, printers are more and more attention to mergers and acquisitions integration. Recently, the United States, "Print Impression" magazine organized online M & A Round Table Forum attracted more than 10,000 printing and packaging practitioners involved, the head of several large printing companies on the buyer and the seller set out to explain the continuation of the good business development under the premise , Mergers and acquisitions buyers and sellers in the delivery, the transition, the process of consolidation responsibility and obligation. This article extracts key points from business managers in forums to readers.

Seller: Get out of the plan

Accurately locate the price

Every company that chooses M & A has taken a fork in the road where they choose to expand or exit. If companies do not see the possibility of further growth in the company's performance, or after many cycles of transformation and reinvention of business Can not keep up with the pace of change in the industry, this time requires companies to liquidate unprofitable business and find buyers for it.

Joe Pollak, president of the Midwestern Regional Association of the National Printing Industry Association, said the process of mergers and acquisitions is generally about 8 months to 1 year, for sellers, the exit plan must be done ahead of schedule, in order to achieve the desired goal. Business-related businesses often can not be sold overnight, if the delay to the final, the adverse factors for the seller will be more and more.

Tom Williams, senior director of financial institutions, said at the meeting: "As a middleman in corporate M & A activities, we often encounter the following situation: the buyer has identified the direction of the business development plan acquisition, the seller's related business has also been listed For years, but when the buyer puts forward a price that we think is reasonable, the seller often thinks the price is too low. "He thinks this is mostly because the seller's psychological price is 20-30% above the market value.

Tom Williams proposed that the price of business-related businesses for sale during a given period of time depends on the current market value rather than the cumulative value of the seller's entire life cycle, and the up-sell approach often fails to yield the expected return. With the passage of time and changes in the market direction, the companies that were bought by the buyer at that time could greatly reduce the attractiveness of the investors and the cyclical changes in the market are more likely to lower the selling prices of the seller. If the buyer's price is lower than the actual value of the enterprise, the seller needs to carefully evaluate whether the buyer can work as a long-term partner of the business partner and treat the sale as a profit-making opportunity to promote the future development of the enterprise and seize the opportunities of mergers and acquisitions.

Buyer: Conduct due diligence

Undertake follow-up work

Compared with other industries, the majority of printing companies in the United States are mostly privately held, and the privacy of financial information often leads to the buyer's lack of understanding of the trading enterprises. International Printing Group Chairman Albert Rigi Mo recommended that before the merger, the buyer needs to obtain as much as possible by law the acquisition of all relevant business information, thorough due diligence on the business, the buyer also need to ensure that all relevant information is highly transparent, To help buyers understand the company's earnings and liabilities, eliminate potential economic risks. In due diligence, the buyer needs to conduct a full investigation of four aspects of business practices: customers, competitors, costs and capabilities. In the case of transactions with smaller companies, the investigation may end in a few weeks, the larger the company and the longer the due diligence period.

On the other hand, Albert Ricky Moh suggested that in the M & A, the buyer can conduct a reverse due diligence, review his own company, whether it is suitable for M & A transactions, whether it is in line with the strategic direction of the enterprise. In addition, the process can also determine the price the buyer originally intended to pay when negotiating between buyers and sellers, and determine the transaction method, such as installments, full payment or financing acquisition.

James Russell, chief executive of A & P Publishing and Printing, said that following the merger of companies, it is advisable that the seller should continue to play an important role until the new company is up and running. In mergers and acquisitions, buyers also often require the seller to provide integration and operational assistance, and as far as possible to retain the original sales relationship, to retain the key personnel of the original important positions. After the merger and acquisition, the seller should have an in-depth involvement in the sales and customer relationship for more than 6 months. If the buyer is a private equity investor without any experience in the printing industry, the seller will still act as the business leader in the real sense of the company during the transition. Even accept the new company's more responsibilities. Only when the seller supports the management team of the new company and continues to participate in the follow-up consolidation can the M & A transactions proceed orderly and a smooth and productive transition can be achieved.

In addition, James Russell suggested that buyers need to respect the seller's career planning and options during the acquisition. "Take the example of Amber Publishing Printing Company, for example, we recently acquired a company that does not want to continue to do business. The company's manager, at his will, made him the head of the company's sales department, Department played a pivotal role. "