Tag Archives: Mergers

Consoliation Hysteria

Much ado about almost nothing

Acquisitions of local companies by large multi-company conglomerates have been the focus of media attention lately.

In the past, companies were acquired without much fanfare. Today, there is quite a bit of hysteria over the activity of “consolidators” — large firms who intentionally go out looking for companies to purchase. Many of these national consolidators are looking to diversify their offerings to print buyers. Rather than just specializing in envelopes, for example, a company would look at acquisitions as a way to reach a larger share of the entire print manufacturing market. Others are looking to diversify geographically to reach more customers, rather than more sectors.

While we hear a lot about the encroachment of the consolidators (after all, they can afford to hire publicists), the acquisition game really constitutes a very small share of the total number of printing businesses being bought and sold.

I’m not saying the movement of the consolidators isn’t significant, however.

Competition is a good thing in our industry, and it is compromised when these behemoth companies are able to negotiate for better deals from suppliers.

Furthermore, they can snag a print buyer who’s buying one type of item and then service him with their subsidiaries when it comes time to bid on other items. On the other hand, massive companies just don’t maneuver as deftly. Sometimes that can work to a smaller company’s advantage.

Either way, I would say the consolidation “trend” is worth watching but not worth worrying about too much.

In any event, I personally know how distressing is when your own company gets acquired. No one talks about how psychologically destructive it is to play the waiting game, wondering if you will be one of the employees chosen to continue on with the new company. Certainly, there are phases of the acquisition that must remain confidential. Still, employees often hear rumors and begin “stressing out” long before the sale is completed. Once the new ownership is in place (often with assurances that all employees will be retained), the not-so-gentle process begins — that of weeding out the people who “just don’t fit” into the new organization.
What do you think? Are the consolidators sending their shadow over the industry as they crest the horizon? Or are they much ado about nothing? I would enjoy getting your feedback.


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