Hi.  This is John Hyde.  I'm a Senior Vice President at NAPL.

I'm working regularly with clients that are engaged in some form of merger and acquisition in the printing industry today and I thought I would just take this opportunity to give you a quick update as to what we see in the marketplace as of mid-February 2010.  And to simplify this it comes down to one thing: companies are either trying to grow by acquisition or owners are looking to get out.  And the ones that are looking to get out today are really faced with very difficult circumstances.

Many of the companies that have just hit a wall are encumbered with too much debt, depleting asset values, a lack of alternatives, they're running out of cash, I mean it's pretty gruesome stuff.  Are there companies that are treading water that would like to sell their business, but can't?  Absolutely.

So, what we're seeing today is really an almost an imbalance where there's many owners who just simply can't get out of business with anything left and these are the companies that are engaged in some form of debt restructuring and/or distress sell.  Now, what does that mean?  It means that the companies that are growing are taking market share from these folks and at the Top Management Conference, Andy Paparozzi, our Chief Economist, I think outlined the case very well for companies will gain market share at the end of the recession from those who will not survive.  And there's quite a number of companies in our industry that simply are just not in a position to continue to survive and grow and they will cease to exist.

So those are the companies that are on the seller side of the merger and acquisition dynamic.  Are they sold in transactions involving a lot of cash?  No.  Are these happy sale of business situations?  No.  Are they usually tied into some form of debt restructuring?  Yes, almost every case right now involves debt restructuring with or without bankruptcy as a means to enable the seller to actually close the transaction.

So the companies that are growing, the ones that are gaining the sells from these distressed companies they're growing, they're doing well, they're going to continue to build their businesses.  The ones that are no longer able to continue in business, those are the companies that today are on the path towards an exit through some type of orderly transition.

Is it ugly out there?  Yes, absolutely.  Are there opportunities for those companies that want to try to grow and gain market share?  There are.  If you're an owner thinking of that, what's the first thing to do?  My recommendation is get to know others in your area.  There's nothing better than having an owner who's out there visibly in their market place getting to know their competition, getting to know other companies, because let's face it the first step with any type of merger and acquisition situation is chemistry.  There has to be chemistry between the owners.  So if you're an owner and you're thinking of gaining market share, you're thinking of growing, it's time to get out there and make sure you're meeting your peers in your market place.  That will be the first step trying to participate in the trend towards growth by acquisition.