Friday, February 22, 2019

First Quarter Decisions

With the strong economy seemingly back on track, there have been fewer new distressed M&A opportunities in the printing and graphic communications industries. Historically, the first quarter has been a peak time because family business owners of companies that are financially “treading water” come back from holidays with spousal/sibling support for “doing something.” As the year-end financial reports are wrapped up, and with family encouragement fresh in mind, owners of challenged companies evaluate strategic options such as putting the business up for sale, or finally accepting the lunch date from the competitor down the street. 

Not sure if the current quiet environment for acquiring challenged competitors is an aberration from long term trend, or the lull before the storm if the economy begins to wobble.

Friday, February 8, 2019

Treading Water

Companies in the printing and graphics communications industry that are “treading water” should take note that the most difficult/critical question directly correlated to success or failure of transition from ownership is WHEN to pull the trigger. More than 50 percent of clients emerging from distressed M&A and orderly wind-down cases over the past 25 years acknowledge “waiting too long.”

Friday, February 1, 2019

Use Caution with Alternative "Instant" Lenders

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Advice to business owners of struggling companies in the printing and graphic communications industry: start now to wean off loans tied directly to your business checking account. The daily cash grind inherent to distressed businesses will be more lethal. These loans now have strings-attached, but in bad times, the strings will feel more like rope for the unprepared. The likes of Kabbage, On Deck, and a myriad of other alternative lenders did not exist in the last economic downturn. They will pose an existential threat when the next credit crunch arrives, as the very nature of the debtor-creditor relationship is altered by the prevalence of daily or weekly payment and auto-debit tied to these loans.