Investment and Acquisition in the Print Industry

30 July 2009

Challenge

To assist in the Due Diligence process regarding the acquisition and merger of two large international ink manufacturing companies by providing a comprehensive view of the future demand for inks and flexo printing plates in Europe and the US.

Approach

Collection and analysis of published data relating to current market shares and volumes of ink by manufacturer, ink type and geographic region, combined with Pira data on future demand for print products was supplemented by an extensive interview programme in Europe and the US amongst key print publishers and producers.

The resulting data enabled a comprehensive picture to be compiled of ink and plate demand by product type and region, which provided a projection of expected sales revenue as input to outline budgets for the merged companies.

In addition, the interview programme provided indicators of major drivers of change and other influencing factors providing a basis for risk evaluation.

Recommendations

Overall it was established that growth in the market for inks and flexo plates could be expected although with some sectors and regions being much better than others. The proposed merger would bring two companies together with complementary products and geographic coverage, which would enable the growth opportunities to be maximised, while also enabling some rationalisation in manufacturing. This component of the Due Diligence was therefore supportive of proceeding with the acquisition and merger.

Benefits

The client obtained the best possible view of the future product sales bearing in mind competitive developments, print product market dynamics and technology changes. This contributed to the ability to raise finance from a variety of sources to support the acquisition and merger, which has subsequently been successfully completed.