I am Paul Reilly, a partner at New Direction Partners.  A trend that we see in the M&A of the printing industry is the castless merger.  It's done for a variety of reasons.

We just had a great example of one.  It was two fairly large companies in the $70 million range.  One was a classical solution sale company... did great things with their customers, provided levels of service and types of services that few of their competitors.  And the other one was a product-oriented business; they had several product lines, and they made and delivered those products better than anybody else.  They had some discussions together, and they knew that there were benefits of coming together.

They gave us a call, and we helped them.  We helped them over a period of about nine months.  And we went through a proven multi-step process to take them through an idea to a successful solution.  And the first place we started with was putting together the benefits of what the merger would be, and we did three or four off-site meetings, two or three days.  And we sat down with the executive teams of both businesses, and we said, “These are the benefits,” and we went through it.  And the entire group then owned the benefits.

Then we sat down and said, “Well, how do we put the two companies together?”  We did a relative valuation:  this company is worth A, and this company is worth B.  At the end of the day, that process took a lot longer.  In fact, we put the negotiations on hold for a while, and then we came back, but at the end of the day we agreed on a 50 percent ownership of each.

The third step is what we call “social issues,” and there we went through “Who's in charge?”; “What does the board of directors look like?”; “What decisions get made jointly?”  And we took them through that.

At the end of the day this merger is doing very, very well.  We're about a year past the actual day when they're together, and the combined value of this company – now that the synergies have been realized – it's at about 75 percent more value to the shareholders than what they had before they went in.  But we went through the process, and it's just not something you do around a table.  You have to go through each of those steps.  So the first step is understand the benefits, then go through your relative valuation, and then go through the social issues.