Are these winds of change, or is a storm coming?

When is the right time to sell, merge or exit the printing business? The adage ‘buy low and sell high’ may be the ideal, but in today’s volatile economy, that lofty goal may not be possible for many. M+A activity and Canadian business insolvencies fell 24 per cent annually in 2020. The majority of the credit is due to government subsidy programs, which have helped those with weaker balance sheets weather the storm. This means that 2021 will see a significant increase in activity and for those contemplating a change in ownership, detailed planning and preparation is required now.

The biggest challenge is likely the emotional preparation. Many owners have spent decades building a business with the goal of reaping the rewards in retirement. Not all realize that selling a business often takes years.

Watershed events

Quick sales are often the result of a watershed event and rarely achieve the financial goals of the seller.

It’s not uncommon for owners to wait until it is almost too late. We’ve met a number of owners in their 70s and 80s struggling for an exit plan, and with the impact of the pandemic, their choices to exit the business are more limited and closure is more likely than a sale of the business with a smooth transition for staff and customers.

Business valuations

Normal business valuations based on an average of financial performance of the most recent three years. Recent studies indicate that revenue decline for commercial print in 2020 reduced by 17 percent but in reality, we speak to many who experience a 20 to 45 per cent decline. Some will hold on and think they can turn this around, but here are two factors to consider:

      1. Financial performance of 2020 will impact the company’s valuation for the next three years.
      2. Some studies indicate the “next normal” will not likely see work return to the 2019 level of demand for printed products in the next five years. (Commercial print is forecast to grow at 1 per cent annually until 2025). This means that new work you win will face fierce competition and margins.


  • Fresh eyes – use a friend or an impartial advisor to help.
  • Don’t rely on selling or merging with a friendly competitor – would you sell your house with only one offer?
  • There are typically a few options to explore: sale, merger, closure, tuck-ins and tuck- outs (divest non-strategic assets).
  • With merger and closure, there are many considerations to maximize value for all parties and ensure that staff, customers, creditors and the government are dealt with fairly.
  • Excluding the real estate, your key assets include facilities, equipment, staff, location, IP and goodwill – if you can monetize the value of your customer base.
  • Advanced planning is required to reduce the personal risk associated with a closure.
  • Don’t wait until it’s too late. If you are forced into bankruptcy, the banks will take over.
    • Trustees can dispose of facilities and equipment, however typically are not good at dealing with your customer base.
    • Once a bank comes in, your focus will shift from your customers to meeting the bank’s demands.
    • By the time you monetize the value of your customer base, your salespeople and customers have found new suppliers and there is little chance that someone will be able to incorporate the sales.

Remember, change is difficult, but it can be handled if it’s planned.

By Bob Dale and Gordon Griffiths
As seen in the PrintAction March 2021 issue