So, who would buy your print business? – Market report

Experiences print business salesman Richard Rasmussen looks at who will buy a company and the answers may surprise.

The first thought that goes into my head when I am approached by a printing proprietor who wishes to sell their business, is “who do I know that would buy them?”

Our market evidence shows that 100% of the 23 print related business we have come from inside the trade. So that narrows the field down a bit.
So the buyers are existing printers or persons / people from within the trade.

The next thing we do is to appraise the business – to do this specifically we look at:

• Its financial performance over the past few years
• Its clients – what type they are, what balance
• Type of business
• Type of work
• What they outsource
• The equipment – type, age, market values
• Employees – number, type
• Location
• Premises

These details allow us to determine who the best fit for the business are. As we have many prospective purchasers on our books, our first port of call is to look at them and ascertain if they could be a fit for the business:

• Do they want the equipment?
• Do they want the premises?
• Can they, and how are they likely to pay?
• Do they want the staff?
• Where does the value lie?
• Would it fit culturally?

A recent sale we made looked like this:

	Buyer on our books	Seller
Location	Within 10km of seller
Equipment	A3, with older A2, no CtP	A3, Automated A2, CtP
Sales	Looking to grow business	1 million plus sales
Staff		8
Cleints		Mostly direct

The match is logical – the purchaser could acquire the clients, most of the staff, and update equipment – a newer guillotine, automated A2 press, and enter CtP.

We didn’t need to advertise the business. We had the buyer on our books, knew what equipment they had and what they required, and made the match/sale.

Another recent sale went down the same path – in fact the vendor said to me, after the sale was concluded, was that the most important part of the value we added was the ability to match his business to the prospective purchaser’s business.

More often than not, however we also advertise the business, and then qualify the respondents to see it they could be a suitable match. But the process is the same.

In other instances we may develop a target list of prospective purchasers, even if they have not registered with us as a buyer. For example it might be that the best prospect is a design agency or print management company.

It’s important to note that different buyers have different needs. For example there are many buyers out there who only want the sales. We could sell these client lists easily, but in most instances it won’t deliver the best overall result for the vendor, because they would subsequently need to sell off the equipment.

So in general terms it’s best to sell the business as a going concern to someone who wants that lot (if that person exists), then sell the business as a going concern to someone who wants the clients and most of the equipment (more in this sector), then to sell the client list and equipment separately.

Each of the scenarios has different potential buyers. Where you have old, run down equipment, it may be better to first sell off the client list / goodwill, and the machinery.

Split sales can work very well. For example we once made four different sales – sold off the majority of the client base to one, the remainder, with some equipment to an employee, sold privately a major piece of equipment and then auctioned the rest. The sum was the same as what we thought we could get selling the whole business as a going concern to one purchaser.

So there are many ways to sell your business – the key is to identify the prospective buyers which can see value in your business, or parts of your business, and who in sum will deliver the best overall outcome.

Ascent Partners is a specialist business sales agent in the Australian printing and graphic arts industry. Contact Richard Rasmussen on 0402 021 101 or visit our web site at www.ascentpartners.com.au, where you view our services and the ten Australian print related businesses we currently have on the market.