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Strong, local converters resist consolidation



While M&A's are happening with larger label companies, the trend is yet to reach many smaller businesses.



By Rock LaManna



Published July 1, 2013
Related Searches: Label industry
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The fragmentation of the label industry is amazing. According to Alexander Watson Associates, there are 15,000 label converters worldwide, and approximately 3,500 in North America. Probably 80% or higher are under $1 million in sales. You’re seeing a lot of consolidation with larger label companies, but this has yet to reach some of the smaller label companies on the market. I’ll detail this phenomenon in upcoming articles with L&NW, but I want to touch on a few reasons in this post.

In many ways, we may be seeing a clash of Wall Street and Main Street right before our eyes. Wall Street, and by that I mean private equity groups and banks, and even larger companies in the converting business, are looking to consolidate many of the smaller label companies.

However, smaller label companies are resisting these overtures. The reasons are many: Fear of the new financial paradigm; a reluctance to depart from what’s worked in the past; hesitation to expand partnerships and alliances beyond the family business…the list goes on and on.

For those who recognize the potential rewards for adopting some Wall Street strategies, such as pursuing a merger and acquisition or an alliance with a complementary business, you can achieve significant results. Better yet, you’ll keep the business relevant in the current marketplace. 

Here are some things to consider if you’re looking into mergers, acquisitions, or alliances down the road:

• Establish your niche: Consider the potential allure of your business. What exactly do you bring to the table? Do you have a significant customer base, thus ensuring geographical market share for a partner? Do you use a technology that sets you apart from the rest? Establishing your niche will not only help your business today, it makes you infinitely more attractive for a strategic move down the road.

• Move toward ISO standards: ISO 9001 are international quality standards for the printing industry, and they carry tremendous weight both in terms of new customers and potential partners. With an ISO 9001 designation, you’ll demonstrate to potential customers that you’re adhering by the industry’s best practices. This bodes well for new partners as well, as it indicates you’ve integrated quality into your management systems.

• Create a sustainability strategy: The long-term need for sustainability can’t be underestimated.  Your customers will rapidly put the onus of creating sustainable products squarely on your shoulders. Becoming innovative in this area and establishing yourself as a leader will speak volumes to potential strategic partners.

You may have strength in your local market, which is fantastic. Now it’s time for you to demonstrate your leadership and management expertise, and develop a strategy to execute your plan. Leverage that local presence, and you can maximize the value of your company. 

Rock LaManna helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.


- See more at: http://www.labelandnarrowweb.com/contents/view_online-exclusives/2013-05-14/how-to-get-along-better-with-your-banker/#sthash.ygaNX0m2.dpuf

Rock LaManna helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.


- See more at: http://www.labelandnarrowweb.com/contents/view_online-exclusives/2013-05-14/how-to-get-along-better-with-your-banker/#sthash.ygaNX0m2.dpuf

Rock LaManna helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.


- See more at: http://www.labelandnarrowweb.com/contents/view_online-exclusives/2013-05-14/how-to-get-along-better-with-your-banker/#sthash.ygaNX0m2.dpuf Rock LaManna helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.

- See more at: http://www.labelandnarrowweb.com/contents/view_online-exclusives/2013-05-14/how-to-get-along-better-with-your-banker/#sthash.ygaNX0m2.dpuf


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