Dave Broadway, managing director, CFH Total Document Management
I could see mergers increasing during 2010, but I simply don’t think most printers have access to the levels of finance necessary for any major acquisitions at the moment. Mergers are not the easiest things. It is hard for business owners and directors to agree how the new business might be managed and owned. Is the whole worth more than the sum of the parts? For a merger to be successful, there must be some synchronicity and, therefore, usually cost reduction - but which business gets reduced? In the current climate, we could see mergers increasing as a result of necessity, rather than desire.
Martin Ruda, managing director, Tall Group
I think it will increase. The significant rise of companies going into administration coupled with the competitive pressures in the marketplace means that we’ll see more business going under and falling by the wayside. There are many companies in distress and I think we will see the full impact of the recession for years to come. Solvent and successful companies will see business opportunities to build and grow their market share through mergers and acquisitions. In this climate, the old cliché rings true, with the strong getting stronger and the weak getting weaker.
Nigel Horner, financial director, First Class Post
It’s not that easy to just go and buy a company, or to merge. To find a suitable company to buy or a suitable partner to merge with can be like trying to find a needle in a haystack. Cultural fit is a crucial element of the process. So many times, a merger or acquisition fails because key people leave as a result of poor communication and a focus simply on money and ownership. The unique value of an organisation lies in the mix of people and their talents. If these walk away, you have formed an alliance with an entirely different organisation.
Robert Aldridge, managing director, Aldridge Print Group
I’m not sure if activity will increase, I am not sure how many companies are in a position to buy a business as a going concern. However, administration buys will definitely continue. I have never bought a company out of administration and I don’t think I ever would. When you buy a company out of administration you don’t know exactly what you are getting. While it may seem like a good deal at the time, you can end up uncovering a lot in the end. By its very nature, the deal has to be done quickly so you don’t get the chance to look over it properly. When you buy a company as a going concern you can take much more time over it.
