Consolidation in the printing industry shows no sign of abating in 2017 and business owners need to prepare for the flow-on effects, says industry expert Richard Rasmussen, owner/director of Ascent Partners.
“The Bluestar deal to purchase Franklin Web and AIW, together with the PMP and IPMG merger announcement, means that we look set to have a duopoly in the heat-set web market in 2017,” says Rasmussen. “The flow-on effects will be felt in the industry for a long time. The ‘from five becomes two’ is reflected in the diminishing number of printing establishments over the past five years. And this consolidation activity shows no signs of abating.
“These mega deals, along with the announcement of the oOh Media and APN Outdoor merger to create a 1.6 billion ‘leading diversified media group’, are symbolic of what is going on in the industry with far smaller businesses."
In the latest edition of Ascent’s monthly industry bulletin Market Watch, Rasmussen lists three key points that printing businesses need to keep in mind for the year ahead.
1. Don’t think you’re immune to the effects this activity will have on the industry in 2017 and on your specific market segment. If you’re not actively involved, there is very high chance your competitors are. Will you soon be competing against someone who is now near full capacity because of acquisition? Will you now have stronger, more cost efficient competitors?
2. BE PREPARED to be involved in consolidation activity. It doesn’t matter what side you’re on, the buy or the sell, or the merge - all require preparation and planning. So, if you’re open to the idea of entertaining a discussion, make sure you’re prepared. Know what your business is worth, how it is sold, what help you need to maximise your return, and how to improve your business’s attractiveness.
3. Draw a big red circle around when your property lease expires. This more often than not is a major trigger point – Ask yourself do I continue to ‘go another 3-5 years’ with renewing a lease or do I transition to the next phase? Forward planning is the key as the decision needs to be made well in advance of ending of the lease.
Rasmussen adds: “Having been involved in over 60 business sales, acquisition and merger deals in the industry, conducted over 150 business appraisals/valuations, and helped proprietors plan to transition their business to the next phase, we’re well equipped to help you prepare for this activity no matter which side you’re on.”