Compass Report--The State of M&A

Rumors are swirling about other possible transactions and it is just a matter of time before the likes of Donnelley, Moore, Standard Register, Reynolds & Reynolds or Deluxe decide to diversify into some segment of commercial printing.

Private companies will continue to throw their hats into the ring. In spite of lower values and fewer, more selective buyers, small companies will continue to hang For Sale signs during 2000. This anomaly will occur as independent owners feel the increasing press-ure of the consolidators' buying power on their margins. Consol-idator savings in purchases of consumables, equipment, benefits and the cost of capital are now ranging from 6 percent to as much as 12 percent. Small companies simply cannot find those kinds of savings.