In an interview with PrintWeek, John Hyde, senior VP with Rutherford, NJ-based NAPL said, "As the fundamental changes combine with the economic climate sometime the merger and acquisitions go a little faster than at others, but consolidation has been happening, is still continuing and will continue to happen for many years going forward."

The NAPL is a more than 75-year-old non-profit trade organization whose members are owners of printing and graphics communications companies in the US. "We deal with hundreds of clients' matters every year - some of our members are looking to expand their business and we help them with growth by strategic acquisition, while there are other members who are looking to transition out of the business," Hyde said. "But we're not in the brokerage category, where it's all about the deal, because the best work we do may be a deal that doesn't close because of one problem or another. We're an objective resource."

Hyde, whose been putting together printing industry deals for more than 20 years, suggested valuations for many of the top US printing companies continue to hold up despite tough economic times, but added it's become increasingly difficult to sell those businesses for top dollar because most buyers are looking to take advantage of distressed situations.

"For companies that are in trouble, there's very little value to them being sold as a growing entity," he  noted. "The printing equipment valuations continue to decline and equipment appraisals reflect that.  So if you are a printing company, your equipment may be worth less, but the value of your customer base is worth more. And the reason for that is supply and demand - companies looking to grow need and want the customers and they generally already have the printing capacity."

The NAPL recently played a role when Reading, PA-based Standard Group acquired Donald Blyler Offset (DBO) Lebanon, PA for an undisclosed sum. In that deal, as in many others, it was a family-owned smaller printer opting to sell in the face of changing market conditions.  

Hyde noted 95% of the current M&A activity taking place in the US printing industry involves those smaller, often family-owned businesses.  "This is an industry right now that's all about redistribution - the leading companies, which compose about 5-10% of our industry - are growing and they're taking market share from the 90-95% that are treading water or worse," he said. "For some larger printers, this is a time of opportunity and they are doing very well despite the overall decline in printing industry--but that group of successful companies is fairly narrow."

Hyde added the consolidation trend is impacting all part of the country, noting, "Printers in specific parts of the US, such as St. Louis or Arizona, may feel they're in a unique market, but they're really part of national trend."