Log In | Become a Member | Contact Us


Market Intelligence for Printing and Publishing

Connect on Twitter | Facebook | LinkedIn

Featured:     WEBINAR: Keeping Print in the Mix in Customer Communications     European Coverage

Paul Reilly of New Direction Partners talks M&A trends

Published on February 14, 2011

In a difficult market companies look to mergers and acquisitions as a strategic option that can help them grow their business. Paul Reilly of New Direction Partners talked to us about the current state of the M&A market. He highlights two growing trends: tuck-Ins and cashless mergers.

Hello, I’m Paul Reilly, Partner at New Direction Partners.  We see many reasons today as to why the M&A activity is so high.  The one that’s most compelling is the need to grow.  It’s very, very difficult in today’s marketplace which hasn’t been growing to go out in the marketplace and get that new customer, bring in the new business.  But we’re seeing large, small, and medium customers they’re growing through acquisition and it’s a better alternative.  It’s a better way to execute your strategy.

Recently in a very large acquisition we’ve seen Quad Graphics buy-in World Color. And the medium and small size we actually see a growing trend of M&A activity and we see two structures driving it.  One we call a cashless merger.  Actually two medium sized company’s get together, they merge their companies.  One doesn’t buy the other and the owner’s of the two previous companies actually have part ownership in the new business.  The reason why this works is that you get the synergies of merging the two companies together, the cultures of those two companies still exist, and it’s the best way for these two companies to grow in such a difficult market.

In the smaller end of the market we see a structure we call tuck-in  And a tuck-in is essentially purchasing the sales of another company and we’ve said for years the value of printing companies are in the customer base.  Well, the tuck-in is exactly what is happening here.  It’s that you see companies buy another business and most of the compensation that’s being transferred from one to the other is for the value of that customer base.  Sometimes they buy the equipment, sometimes they don’t.  Sometimes they buy the receivables and inventory, sometimes they don’t.  But what’s really important is that they buy the sales of a company and then they merge those two companies together.

Email Icon Email         

 

Post a Comment

To post a comment Log In or Become a Member, doing so is simple and free

 

 

Recent Videos

 

Video preview: Frank on

Frank on "Paper Shamers"

Published: January 19, 2018

Frank goes on a mini rant against those folks who shame us for using paper. He calls them “paper shamers” as he takes them to task for creating guilt trips for those who use paper.

 

Video preview: SGIA and PIA: Why the partnership?

SGIA and PIA: Why the partnership?

Published: January 18, 2018

Ford Bowers, President & CEO of SGIA, talked with us about the partnership between SGIA and PIA, and the value to their respective memberships. A key element is introducing SGIA's membership to the many conferences that PIA hosts, as well as participation in legislative affairs activities.

 

Video preview: iLearning from Printing Industries of America: All new, available 24/7

iLearning from Printing Industries of America: All new, available 24/7

Published: January 17, 2018

Michael Makin, CEO of the Printing Industries of America, shares information on PIA's iLearning University for the printing industry, which has been completely retooled and includes the opportunity for certification across a variety of disciplines, including Customer Service. Core content included in PIA affiliate membership fees.

 

Video preview: Thayer Long on NPES Rebrand and New Mission

Thayer Long on NPES Rebrand and New Mission

Published: January 17, 2018

Richard Romano talks to Thayer Long about the name change from NPES to Association for Print Technology, as well as the association's new mission to drive the industry forward.

 

Video preview: Idealliance: Taming the Wild West of the Packaging Supply Chain

Idealliance: Taming the Wild West of the Packaging Supply Chain

Published: January 16, 2018

Tim Baechle, Vice President at Idealliance, talks about how Idealliance is repositioning itself around three primary goals: communication, education and validation. With offices around the world hte organization's evolution to a think tank has changed the model of how it works. Programs like G7 and BrandQ create a swim lane for the packaging supply chain to create seamless communication. Baechle shares thoughts about how the organization is serving some of the worlds largest brands and converters to tame what he calls the Wild West of Packaging.

 

Video preview: Frank's Favorite Books about Paper

Frank's Favorite Books about Paper

Published: January 12, 2018

Frank is an unabashed paper lover and is into trees. He describes some of his favorite books about paper that are on paper. He also manages to mention Zip disks.

 

View More Videos

 

Become a Member

Join the thousands of printing executives who are already part of the WhatTheyThink Community.

Copyright © 2018 WhatTheyThink. All Rights Reserved