Hot Print Markets Simmer M&A Values

Mark Michelson

The executive summary of Vincent Mallardi's "Hot Markets for Print Demand" in this issue marks the 36th consecutive year that Mallardi has forecast the top 25 sectors/industries that purchase and contribute the most to the demand for print. Whether or not you agree with the growth rate and share-to-print percentage calculations, Mallardi’s analysis is thought-provoking nonetheless and provides a roadmap to the promises and perils that lie within these vertical sectors.

As owners and top managers of printing establishments nationwide, you’ll also want to check out expert assessments on the current state of the industry M&A market. EBITDA sales multiples and valuations for those firms looking to sell their businesses may not be what they were during the heady days of the late ’90s, but they’re sure a far cry better than conditions that prevailed for M&A deals during the Great Recession of 2008-2009. That downturn thinned the herd of distressed printing companies—with many bankrupt shops sold as tuck-ins solely for their customer base assets and others simply liquidated for what the used equipment market would bear.

Today, however, the pendulum has shifted to more of a seller’s market, especially for those companies that specialize in growth segments like labels/packaging, Web-to-print production and customized storefronts, as well as variable data and wide-format digital printing services. Interest among private equity buyers has also been a refreshing refrain—given that Wall Street and the financial markets typically have not sought out our industry due to its perceived low margin, commodity status, coupled with the false assumption that “print is dead” as a result of its widespread displacement by electronic alternatives.

More threatening, in reality, are legislative topics of concern to printers that continue to linger on Capitol Hill. Industry lobbyist Lisbeth Lyons is guardedly optimistic that Congress will pass meaningful patent troll reform this year, despite opposition from trial lawyers and pharmaceutical companies. More murky are the prospects for long-term U.S. Postal Service reform and rate hike stabilization based on an inflation-based rate cap system. And, with 2016 being a presidential election year, an outright repeal, or at least passage of employer-friendly changes to, the Affordable Care Act [Obamacare] will be front-and-center in 2017 based on election results in November. Make our “industry voice” heard by voting for and lobbying legislators.