Within the universe of the thousands of family-owned companies that characterize much of the printing industry and related businesses, three factors are currently driving sellers of healthy companies to bring their companies to market at this time.
The No. 1 factor is simply demographics, i.e., the age of the owners. Baby boomers founded many companies to fulfill the American dream of owning a business, or they acquired the business from their parents. Now 55 to 75 years old, the 76 million baby boomers are aging out, and those that own printing companies are seeking a buyer. Oftentimes, the next generation is either not involved in the business or have no interest in or ability to take over the family enterprise.
The second factor driving sellers to market in the past year is the fear of an economic downturn. Despite relatively low valuation expectations for printing companies sold in place, owners who made it through the Great Recession — now in their 60s and 70s — do not want to work through another down cycle. A modest and reasonable return for all their hard work is preferable to seeing profits and business values plummet as they did in 2008.
Real Estate is the third factor driving the sale of printing companies. With commercial real estate values booming in many industrial regions, owners need to find a home for their printing company to enable a sale of the real estate. For printing company owners that have wisely invested in the facility that supports the business, the need to monetize the real estate asset is the key driver in the decision to sell.
Combine these three factors — age, fear of economic downturn, and ownership of a facility in a hot real estate market — and the stage is set for super-motivated sellers to bring more companies to market in the near future.