If you’re an investor looking to initiate an M & A in the printing world, there are two methods to take as you look to make a strategic acquisition: Proactive and Opportunistic.
The methods were identified by financial expert H. Lee Rust, author of “Let’s Buy a Company.” Let’s take a closer look at how he defined the two approaches.
The Opportunistic Acquisition.
The more passive of the two methods, I would consider this more of a “fate-based” approach. Instead of actively seeking a business, you hear of an acquisition by chance; it could be at a trade show, or from a close friend. It’s the word-of-mouth approach, which is still a very effective way to find an investment.
Even though this is a passive approach, you still have to let people know you’re searching for an investment. Let your customers, peers, suppliers and any other close business connections know you’re looking. In these days of hyper-connectivity, word travels fast, and you’ll likely come across a good match.
The Proactive Acquisition.
If you’re unwilling to let fate handle your acquisition strategy, you’ll probably opt for a more aggressive, proactive acquisition. As Lee Rust says, “You don’t wait for an opportunity; you search for it.”
In this approach, you establish a specific Investors Acquisition Criteria, much like the one you can download at the bottom of this post. You’ll carefully define the type of print-related companies you’re searching for, establishing a synergistic price, competitive fit, and long-term plans.
Lee Rust points out several potential research sources for finding these companies include industry and trade association directories, Dun & Bradstreet, and the Thomas Register. He even recommends the Yellow Pages.
I would add using your own network, or the network of an intermediary, to find the right fit. You could, for example, send a LinkedIn message to your current contacts. They, in turn, might have someone who could fit your criteria.
No matter which method you choose, you need to establish your long-term acquisition goals before you initiate the search. When you’ve got a clear sense of what you want to do and where you want to take your business, either of these acquisition methods can work for you.