Beyond The Press: The Structural Shift Driving M&A in Converting Equipment

Over the past decade, M&A activity across the label and narrow web ecosystem has been dominated by converter consolidation. Far less visible – but increasingly consequential – our recent advisory work has seen consolidation occurring upstream, across equipment, aftermarket spares, service, consumables, and workflow integration.

With a recent uptick in underwriting focus on durability over growth, value creation is shifting away from transactional equipment sales and toward control of the installed base. This shift is not cyclical – it is structural and beginning to reshape margin profiles, predictable revenue streams, and M&A behavior in the OEM and aftermarket segment of the industry.

What’s changed?

For years, equipment manufacturers and distributors were valued primarily on shipment volumes, backlog, and cyclical demand. Aftermarket parts, service and consumables, which represent 37% of the $18 billion US market, were acknowledged as attractive but rarely treated as the strategic core of the business. That perception has changed materially since 2020. In recent sale processes, financial sponsors and strategic buyers alike are underwriting equipment businesses as infrastructure platforms, defined by uptime economics, recurring revenue, and embedded customer relationships.

Today, differentiation has shifted toward:
• Aftermarket capture and service intensity 
• Controls, automation, and upgrade pathways 
• Software-enabled workflow integration and data visibility

Macroeconomic Factors Accelerating Shift Toward Aftermarket Economics

Several forces have converged to reinforce this transition:
Post-Cycle Capacity Digestion: Backlogs for OEMs remain relatively soft, especially compared to the low cost of capital and capacity expansion era of 2021-2022, with many operators quoting system sales and backlog declines of 10% in 2024 and 2025. While new system demand has softened, demand has increased for lower ticket purchase orders and efficiency upgrades.

Recent Trade Uncertainties: Punitive US tariffs starting in 2025 continue to apply to steel, copper, and aluminum, directly affecting presses and spare parts. The result is delayed converter decision-making on new systems while accelerating decisions for incremental controls and upgrades, where comparative ROIs look even more attractive in this environment. Operators quote a robust system; however, purchase order conversion rates have slowed, signaling converter production volume uncertainty.

Continued Disrupted Supply Chain: The blockade of the Strait of Hormuz is impacting OEM sales, especially for EMEA manufacturers shipping to Asia, where delays are seen in deliveries, final acceptance, and time-critical service agreements. The aluminum supply chain has also been affected by the Iran conflict, and this impact is expected to slow orders to converters exposed to this market.

Implication: Equipment demand has been downward trending and deferred due to recent macroeconomic and geopolitical factors. These recent trends have highlighted the inherently cyclical, project nature of system sales in comparison to more recurring revenue streams.

Bobst Reported Sales: Bobst is a major converting equipment and aftermarket product and service provider and offers a glimpse into underlying trends between market segments. Notably, Bobst has recently reported that its backlog for Business Unit Printing and Converting is around 15% lower at the end of 2025 vs. 2024 (2024 was 33% lower than the year before) and has returned to the same level as it was pre-pandemic.

How is Increased Automation Spending Shifting the Aftermarket?

Automation does not eliminate aftermarket opportunity – it reshapes it. More sensors and connected presses expand: (1) Remote diagnostics, (2) Software-assisted service, and (3) Contract-based uptime guarantees, which in turn increase the value of service-led platforms.

Increased automation is raising monetization density per installed unit, driving higher lifetime value and stronger retention economics and is focused on the following trends:
• End users continue to prioritize automation, servo-driven systems, and automated changeovers.
• Many converters prefer preventative service models with human-readable diagnostics, rather than fully autonomous AI systems. 
• Spending is increasingly justified by labor scarcity and downtime reduction, not throughput alone. 
• Capital budgets favor incremental, modular investments over large one-time press purchases.

Consolidation Patterns are Emerging

While converter consolidation captures headlines, equipment and aftermarket M&A has followed a different but related trajectory. Successful consolidators are prioritizing fragmented service and parts ecosystems where density can be scaled regionally, rather than attempting large-scale OEM integrations. With Europe’s web converting and printing equipment heritage, EMEA buyers represent a 25% larger segment of the buyer base in comparison to label converters over the last six years. Over this same period, cross-border deals represented ~21% of all equipment-related transactions vs. 14% for label converter M&As. These dynamics reinforce the importance of a targeted, globally coordinated process.

Noteworthy Roll-Ups

As noted previously, major aggregators span North America and Europe,  and their acquisition initiatives often involve regional expansion and further aftermarket penetration in under-covered markets. Although not an exhaustive list, some of the more active acquirers (and their respective private equity partners) in the web converting equipment industry include: Mark Andy/Center Rock; Maxcess/Bertram Capital; Amtech/Vista Equity Partners; Double E/IGP; and Davis-Standard/Gamut Capital. 

How Investors and Buyers are Underwriting Value Today

Platform Durability: Underwriting has become more surgical. Across recent processes, investors and buyers are prioritizing durability and visibility over system shipment growth, and are placing higher value on the following themes: Smaller ASPs with higher lifetime value outperform large one-time sales; quality of recurring revenue outweighs top-line growth; installed base, life-cycle economics matter more than legacy backlog views; service intensity and technician leverage drive defensibility and increased wallet share of installed base and higher margins; software and workflow tools used to increase retention vs. strictly standalone value; and customer concentration is contextualized against customer dependency. Importantly, assets lacking a credible recurring revenue model are seeing diminished buyer interest trends.

Margin signals valuation: Across recent transactions, aftermarket revenue has emerged as the single most important driver of value. Margin profiles seen across the ecosystem increasingly reflect the degree of recurring revenue and customer integration. Although every system, aftermarket product and service sales vary in differentiation, there are observed expected margin profiles across segments. In quality, more-optimized assets, parts, consumables, and services often represent less than half of revenue but a majority of gross profit and EBITDA given the margin dispersion. More importantly, aftermarket cash flows are materially less volatile than press sales – a characteristic that buyers consistently reward. 

Key Diligence Metrics Driving Value

Here are a few key performance indicators (KPIs) important to stakeholders in today’s M&A market: aftermarket margins and share of gross profit; Average Selling Price (ASP) across systems, products and services; service contract penetration and growth across the installed base; technician capacity, utilization and response time; reorder or renewal rates and contract duration; consumables attachment rate and revenue per installed unit; and percentage of installed base with embedded data and workflow tools that raise switching costs.

Looking Forward

Underlying interest remains strong, but the basis of value has shifted. The next phase of consolidation will reward those who control uptime, data, and replenishment, not those who simply ship metal. The highest-quality platforms will be those that maximize economic participation across the equipment lifecycle, embed themselves in customer workflows and uptime critical operations, and convert installed base into recurring, defensible revenue streams.

Stuart Sanford is a Director at Mezzo (formerly Mazzone & Associates), advising clients on transactions in the label supply chain and across the broader paper, plastics, and packaging markets. Mezzo has advised on numerous transactions across the label and packaging equipment ecosystem.A frequent speaker at industry conferences, Stuart brings deep sector knowledge and practical transaction experience informed by recent transactions and industry relationships.