Industry analyst Richard Rasmussen says strong client bases can be valuable for business owners looking to sell up, adding that there's 'never going to be a better time' to exit the industry.
Ascent Partners' Market Watch has released its 'year that was' report for the 2016-17 financial year, highlighting a large number of sales, mergers and acquisitions from the big end of town to the small. "Businesses were purchased and usually integrated into other like businesses. This is a key business strategy for all sizes of printers and not just the big ones," Rasmussen wrote.
Rasmussen advises business owners considering leaving the industry to look at their individual circumstances, and says if sales aren't what they used to be, now might be the time to cash out. "If you’re a general commercial printer and the trends are not good, there’s never going to be a better time to sell – you’re not going to get more in the next 12 months," he told Print21.
Though your gleaming presses may be your pride and joy, that's not where the money is for printers selling up, as demand for conventional equipment is decreasing and digital machines depreciate quickly. Instead, Rasmussen suggests looking at your 'goodwill', as businesses with strong client bases are hot property. "People want to grow their businesses, and one way to do that is to buy a client list or a business with a good client base. Even if a business is not profitable, client bases are still valuable and highly sought-after," he said.
Rasmussen advises owners of profitable businesses to hang onto them for a few more years - unless planning to retire soon. A few industry veterans have sold their businesses and retired over the past year, most recently Mike Minahan of Digiwedoo, who sold up to Finsbury Green last week. In a statement, Peter Orel, CEO of Finsbury Green, said his company was always keen to buy more. "We are continuously looking out for print, print management and logistics businesses that we can integrate into our operation," Orel said.
Ascent Partners captures this information from industry sources and reports it monthly in the free newsletter, Market Watch. See www.ascentpartners.com.au to subscribe.