PI 400 -- M&A Activity - Acquisitions Yield To Slow Economy

Unfortunately, even though the printing stocks have begun to perform, many of the formerly active public company consolidators, such as Consolidated Graphics and Mail-Well, are being rewarded with multiples of EBITDA for their stocks that are less than four times.

So what happens now?

First, you will see an upsurge in tuck-in "assets accounts" transactions where a local or regional printer buys another local company and simply moves the sales into the buyer's plant. In these transactions, the seller must be able to liquidate assets, pay off liabilities and pocket some cash. But it's not over; the seller then receives royalties ranging from as little as 3 percent to as much as 10 percent on sales for two to five years.