Greg Hrinya, Editor07.20.22
While this might sound like a broken record, never before has the label industry encountered such a tumultuous year. The tail end of 2021 and the first half of 2022 have been ripe with challenges and once-in-a-lifetime events. The industry has dealt with the pandemic and its assorted variants, the supply chain crisis, paper making capacity issues, a war between Russia and the Ukraine, inflation, and workforce challenges. This begs the question, “What’s next?”
As has been deftly noted by many, this is a resilient industry that has learned how to pivot on a dime. The wide range of obstacles impacting the industry has not translated to doom-and-gloom predictions. In fact, many remain optimistic as growth continues to surge.
“While the industry is undeniably still facing challenges, we have a positive outlook for 2022,” explains Michael Degus, SVP, marketing and business development, Resource Label Group. “Demand remains strong and the trends afford continued opportunity. For example, SKU proliferation is still driving digital growth as companies continue to try to differentiate in a competitive market. In addition, shrink continues to be one of the fastest growing label technologies in key markets. We are also seeing expansion into flexible packaging for narrow web converters who are using hard assets to take on shorter runs.”
“The state of the industry is extremely robust and healthy,” states Paul Teachout, narrow web business development manager, Anderson & Vreeland. “Even with continued supply chain issues, pricing pressures and workforce concerns, converters and suppliers both have continued to move the needle. Equipment sales and M&A activity have not slowed, showing that the climate for organic or growth-by-acquisition is still thriving. We continue to hear that converters and suppliers alike are having very successful year-over-year returns through an ever-evolving environment.”
When it is said that the industry has never before seen times like these, it is not hyperbole. Both converters and suppliers have been tasked with on-the-fly changes – from remote servicing to modified schedules. Those challenges associated with the pandemic have extended into extreme supply chain constraints, which have been a source of consternation for so many. Additionally, the Finnish Paperworker’s Union strike that impacted UPM Raflatac added to these challenges.
“We have never experienced a year like 2021 and 2022,” states Leslie Gurland, executive vice president of global sales and marketing, Lux Global Label. “Price increases, extended lead times and material allocation have plagued the industry.”
“We all had to take a deep dive into our resources and capabilities to ensure we could strengthen our position to support our customers and partners through a difficult time,” says Teachout. “We were very fortunate to be slightly ahead of the game, having seven fully stocked distribution centers ready to go, our RFID Vendor Managed Inventory systems in place to reduce foot traffic in customers facilities, and having great partners to work with to manage price increases and supply.”
The challenges have not amounted to a drop in business, though. For many converters, the obstacle has been navigating delays in supply fulfillment necessary to quickly turn around orders.
“The North American label market has had historic levels of growth, typically seen over many years compressed down into a matter of just over one year,” comments JC McKay, VP of business development, FLAG (Flexo Label Advantage Group). “Contributing factors include an increase in consumer demand and spending beyond what anyone could have ever predicted, and with the pandemic many experts are predicting a fast approach to the next financial crisis.”
The same holds true for suppliers, as well. “We have had a good year,” says Dave Grenwis, marketing manager, Delta ModTech. “We are experiencing growth as label converters are expanding and looking for more flexible converting systems to help them succeed in new markets such as RFID and medical industries.”
E-commerce has played a big role in the landscape of label and package printing. While this sector was already trending upward prior to 2020, the pandemic contributed to a seismic boom.
The pandemic caused other behavior shifts as well, as Victor Gomez, director of industrial labels, Epson America, notes. While he anticipates continued success for the industry, he cautions mindfulness as the industry reacts to current and future challenges. “Right now, we may be too busy getting work out the door and locating sources of media supply to notice that another shift is underway,” says Gomez. “The label boom we’ve been living through has come largely from consumers staying home, ordering products online and shopping at supermarkets rather than eating out at cafeterias or restaurants. As more people drive to work again or begin going out, traveling for vacation or business, the balance of consumer spending on products and services is starting to shift again. This is happening just as the federal direct subsidy ends and prices are rising at a rate not seen in 40 years. As a result, we should wonder at what point the consumer dollar will start to buy fewer products that require a label.”
There are a number of steps converters can take to plan ahead for the future. Communication is key throughout all levels of the supply chain, and testing additional materials and conducting inventory planning are key as well.
“We have navigated the challenges through transparent communication with our customers, suppliers and employees,” notes Gurland. “We strive to follow one of our key guiding principles – a sense of urgency in everything we do. We have to stay laser-focused in everything we do. We also have longer visibility of our customers’ forecasts, and we’re trying to increase the number of material options for availability and cost containment strategy.”
According to McKay, suppliers and converters have had to innovate like never before in response to recent events.
“Suppliers and converters have needed to pivot their business directions and get creative as to how to alleviate the shortages and continue driving business forward,” he explains. “This has led to qualifying alternative materials with customers, resetting lead time expectations, moving from what used to be a just-in-time environment to now weeks and even months, or even turning away new business. The industry will continue to demand innovation and the ability to change amongst both converters and suppliers. The difference between success and failure will be defined by a company’s ability to think forward.”
How a company navigates the supply chain will be imperative in the future. Epson, for example, boasts redundancy in its manufacturing operations and a diversified product portfolio across consumer, professional and industrial products. The company’s operations allowed for a better response, which matches its expectation for the future.
“Because we make all our own critical components – such as printheads and ink – we have more control on our supply chain than most competitors,” says Gomez. “But we do have to work through issues that affect everyone, like port congestion and container allocations. I must point out that, beyond keeping a healthy supply of consumables, we have not jumped on the bandwagon to raise prices on Epson SurePress or ColorWorks ink. Instead, we are doing everything possible to maintain a predictable TCO for our label customers.”
Plus, association involvement has been critical for many. From FLAG and FTA to TLMI, collaboration and the sharing of best practices are not just luxuries when dealing with these unprecedented challenges – they’re a necessity.
“For independent converters, all of these challenges have required them to think forward and find leverage every way they can,” adds McKay. “FLAG members have found an advantage amongst themselves in that they’re able to share best practices, innovate and strategize together around ways to overcome the supply chain challenges and ultimately make their businesses stronger as a result.”
Doug Horn leads the packaging domain for Clairvest, a top private equity firm that partners with entrepreneurs to help them build successful businesses. He recently sat down with L&NW to provide his view of the label and package printing landscape.
L&NW: How would you characterize the state of the label industry in 2022?
DH: I think we are in a Goldilocks moment – not too hot, not too cold. There has been a surge in interest in the labels segment over the last couple of years – nearly every major label company has traded hands and is now under new ownership. The industry is very attractive thanks to its exposure to consumer staples. However, the resiliency of the segment has and continues to be tested by inflation and the need to increase pricing, restocking and destocking from end consumers, supply chain risks, labor availability, and machine lead times.
L&NW: What impact has M&A had on the label and packaging industry?
DH: The rate of consolidation has accelerated in recent years driven by global players and private equity-funded platforms. More than 80% of the top 100 label converters from 2000 are no longer independent. The biggest impact is that we are seeing both mid- and large-size label companies take market share from smaller independents as these larger companies tend to be better capitalized to invest in automation, management, sales and operational bench strength, and M&A.
L&NW: How have the many challenges associated with the pandemic/supply chain affected M&A activity, and what are your predictions for the future?
DH: The fallout from the pandemic and the supply chain constraints has intensified M&A interest from my discussions with privately-owned companies. We are seeing some of the mid-size players re-energize their interest in M&A as both an offensive and defensive tool – not only to diversify and grow their revenues but also to access different geographic labor markets and gain buying power with their suppliers.
Likewise, the market volatility has whipsawed some of the smaller companies in the space. It has brought forward their intentions to sell given the stresses of the last few years.
L&NW: What are the benefits for converters partnering with private equity firms?
DH: We are big believers that independents can still win in this industry. It’s still a very local/regional business, where outstanding customer service matched with capability is a differentiator.
We typically buy into companies alongside entrepreneur owners who are looking for a private equity partner – not as part of their retirement plan – but to help them gain scale with sourcing and funding add-on acquisitions, investing in new equipment and automation tools, building out their teams and generally providing strategic guidance on their
growth journey.
L&NW: In addition to M&A, what other trends are you seeing in this space?
DH: The value proposition for the higher end label companies continues to center around quick turnaround times, smaller order batches, sustainability and digital capabilities. Companies that can master some or all of these elements are poised to grow at 2-3x the industry growth rate over the coming years.
Also, we are seeing customers looking to make their supply chains less fragile – which means a subtle move toward a greater number of suppliers where price is still important but reliability even more so.
Lastly, ESG is top of mind for all industry players driven by the targets put forward to the market by the brands.
“Scale will become more important due to the significant investment needed to compete with state-of-the-art technology and the economic benefits in raw materials, operations, and security of supply,” explains Resource Label Group’s Degus. “We also see a growing customer trend to consolidate suppliers to simplify their supply chain, ensure consistency in packaging, and capitalize on economies of scale. Given this, there is a need for owners considering a succession plan to look to the future. Multiples have been at historic levels, but rising interest rates and an impending recession will start to push multiples and valuations down.”
“When the pandemic hit, I expected a wave of M&A activity to sweep over the industry as it did after the 2008 financial crisis,” states Epson’s Gomez. “But the relentlessness and endurance of the consolidation has surprised me. There was more investment capital waiting to pounce on opportunities in our thriving industry than I expected.”
The impediments created by the Covid-19 pandemic and the pressures on day-to-day operations could push business owners to rethink timing when selling. The industry is also reaching a critical time where generational changes and succession planning are top-of-mind for so many.
For many companies, especially smaller and mid-size label converters, M&A opens doors. “Mid-size companies with the right assets and mindset can gain low hanging fruit from the larger players in the market,” says Lux Global Label’s Gurland. “For example, Lux is mid-size with the capabilities of the larger organizations but the speed and agility of a small company. We continue to obtain new clients because we can offer cutting-edge products, speed to market and truly personalized service.
“Smaller companies can become part of PE-backed groups that can provide them with resources to compete with the mid-size companies in a way that they couldn’t before,” she adds.
According to Anderson & Vreeland’s Teachout, we are currently living in the “Generation of Consolidation.” This activity, he notes, has changed the industry’s landscape. “Twenty years ago, we dealt with mostly private owners and single rooftops. This is no longer the case,” he adds. “Current economic trends show things are starting to shift, but the M&A activity is still brisk and shows no signs of slowing. We are a very attractive, resilient industry that provides essential services to a global audience. I feel the pandemic only exposed this more, and the investment in our industry has created untapped potential.”
Many label converters have opted to enter the private equity world to leverage the assets of the buying group. With the continued supply chain challenges, having that access should alleviate some pressure.
“For 2022, supply reliability and response times will continue as the biggest challenges,” notes Degus. “An inconsistent and unstable supply chain, coupled with strong inflationary pressures, will force us to constantly work toward how we can alleviate the strain for our customers. It will be critical for buyers to partner with a company that has the resources and capabilities to navigate this challenging situation.”
This was a distinct advantage for Resource Label Group’s vast label family. “At a challenging time like this, scale provides a lot of benefit in the label industry,” Degus adds. “With coast-to-coast operations, we had the flexibility to move and share materials and orders between facilities. We worked collaboratively with our strategic suppliers to develop order management programs to effectively manage the uncertainty and instability in the supply chain.”
For inquiring minds at many leading label converters, M&A is not necessarily a slam dunk, though. There are risks involved, notes FLAG’s McKay.“It’s hard to say whether or not M&A has made a positive or negative impact on the packaging industry,” he notes. “The large consolidators continue to get bigger, leaving independent converters in even more of a challenging environment. Typically, when a label converter sells to a larger company, they are told that business won’t change, they’ll operate similarly to before, and the team that’s in place will remain. If luck is on their side, all of these things are true and the shop is kept open and allowed to operate as usual.
“The majority of these acquisitions, however, are made with the intention of providing investors a significant return,” adds McKay. “With that comes increased corporate accountability and pressure for bottom- line results. Unfortunately, in a worst-case scenario, the facility is closed with only the book of sales going to the acquiring entity.”
M&A activity can have an effect on the sales cycle, too, as Epson’s Gomez explains: “Decision making is often removed from each acquired site – where long-term relationships were forged – to an impersonal home office,” he details. “Consolidations can also cause personnel turnover among influencers or decision makers, which tends to delay investment decisions.”
“Sustainability continues to be one of the pillars of our industry,” states Anderson & Vreeland’s Teachout. “Everyone is on board in reducing our overall environmental impact and carbon footprint. I see so many facilities now that have achieved landfill-free operation and sustainable certifications.”
As companies make sustainability a priority, it must be noted that environmental practices start at the top – and they must be prevalent throughout an organization.
“Sustainability is very top-of-mind for us as a company and is quickly becoming a requirement for conducting business. More importantly, though, it is just the right thing to do,” remarks Resource Label Group’s Degus. “To be successful, it was critical to us that sponsorship of such an important initiative started at the executive level. We have implemented structural programs that support ESG and provide the data needed to monitor KPI’s. We have dedicated key personnel and resources to support our efforts in this area. Our goal is to make sustainability a key part of the Resource Label Group culture.”
Sustainability has tremendous momentum in our industry. More companies than ever are seeking APR certification, and the establishments of organizations like CELAB add to the industry’s insistence on solving these key challenges. It is no longer an option to put one’s head in the sand.
“We are working with all of our suppliers to find the best materials, trends and solutions that have real merit in the sustainability and recyclability space,” notes Lux Global Label’s Gurland.
From the association standpoint, FLAG’s McKay has seen commitments to sustainable operations and the consumption of fewer resources, waste recycling as a new resource, the reduction of the operation’s overall carbon footprint, accountability from external organizations, such as FSC and PEFC, and a rising awareness driven by the market to full spectrum sustainability.
“Most of the suppliers in the label industry are driving initiatives within their organizations to promote sustainability, hold themselves and their teams accountable, support their converter customers with new sustainable opportunities and more,” explains McKay. “While brands and end users strive to have 100% sustainable products, costs have typically proven to be higher than traditionally non-sustainable converted products. The higher costs are creating new challenges for these brands and end users, sometimes even forcing them to turn back on their original sustainable initiatives. Though sustainability has its challenges, as it evolves, I believe the industry as a whole has taken tremendous strides toward a better future for label manufacturing and the planet.”
Brands have been instrumental in this shift, too. According to Degus, Resource Label Group’s customers have become more discerning than ever when it comes to environmentally friendly practices and materials. “Our goal is to take a consultative approach and guide customers through these hard to navigate topics,” he says. “We encourage them to involve us early in the process to avoid any issues that might result with end-of-life impacts. Our customers have more questions than ever, ranging from very simple to extremely detailed. We encourage them to pull us into the conversation early to ensure they are headed down the right path. Sustainability is a full packaging discussion – our responsibility does not start and stop with just the label. We recognize that sustainability is constantly evolving, and we remain highly committed to investing in the people, technology and capabilities to help our team and customers on the journey.”
“What got lost a bit in the news about the Finnish Paperworkers Union strike was that in North America, we are facing a structural supply shortage when it comes to paper materials,” explains Tim Kirchen, senior vice president, Americas region, UPM Raflatac. “Currently, there is not enough paper material made in North America to fulfill all the demand for paper materials, especially if we look at packaging, graphics, and label-related paper raw materials. Just in the last two years, we have seen a reduction of 3.5 million tons of coated and uncoated paper capacity locally due to mill closures and production diversion. At the same time, we have seen unprecedented growth in our industry.”
Following the conclusion of the strike, Kirchen estimated it would take 8-12 weeks for materials to make their way to North America. That timeframe lines up with the mid-year point of 2022. “We will continue to work tirelessly with our domestic and global suppliers to secure materials necessary to respond to the structural demand growth in our industry,” adds Kirchen. “I am very optimistic that future supply chains can be more robust.”
“The immediate problems of media supply create a bottleneck because expanding production capacity becomes harder to justify when suppliers are not taking new customers and are placing existing ones on allocation,” adds Epson’s Gomez. “This temporary situation affects the timing of some buying decisions.”
When dealing with these challenges, suppliers have emphasized the importance of communication and transparency with their customers. This has been especially true with substrates.
“Our first priority has been to protect as much of our customers’ business as possible through alternative liner materials and allocation,” says Hart. “We have tried to be as transparent as possible with customers regarding the ever-changing and continuously challenging supply chain situations and inflation over the last two and a half years. We continue to focus on internal productivity to help keep costs under control.”
The future of this industry will focus on the uncertainty of inflation but also service as customers look to manufacturers for improved lead times and fewer allocation restrictions. Even with the paper strike in Finland resolved, it will take some time for supply and lead times to normalize.
“The strike in Finland had such a major impact on the industry because paper supply was already very tight, with overall paper production capacity shrinking in the years leading up to the strike and demand at an all-time high,” says Hart. “In the long term, as an industry we still need to solve the supply chain challenges we face. Avery Dennison is looking at strategic investments, partnerships and opportunities in sustainability and circularity, as well as raw materials. Product innovations, which have taken a slight backseat over the last seven months, will again take the forefront as we expect to see many manufacturers launching new products and solutions.”
“Over the last couple years, most label converters continue to see massive growth in their businesses,” says FLAG’s McKay. “Suppliers are also in a position to see expanded growth as a result of investing in new technologies. Whether it’s a new press, conventional or digital, finishing equipment, prepress plates or information technology platforms, the adoption of new technology has almost been required to keep up with these growing markets.”
Label converters, by and large, are still willing to invest in the newest, cutting-edge products – as long as it makes sense for their business. In many cases, the latest automated functionality has the potential to alleviate some of the constraints caused by the workforce challenges common in the manufacturing space.
“Our company remains highly committed to investing in the right technology at the right time,” says Resource Label Group’s Degus. “The current environment has made this even more critical as customers are requiring more innovative, cost-effective solutions to meet their growth strategies. Our ability to have access to the right technology will be vital to being a good partner and helping our customers win. We firmly believe if you stop investing and innovating you are destined to fall behind.”
“Data is power,” adds Lux Global Label’s Gurland. “The use of BI tools allows you to share information that empowers your employees and supports your customers. Over the last four months Lux has focused on connectivity through Microsoft Teams in a way that has truly transformed the way we manage projects and communication. Our employees are embracing it and are excited about this endeavor. This will only continue to get better.”
This has been evident from the manufacturer side, too. “Many of our customers are willing to grow and expand, and they are embracing the need to change,” explains Delta ModTech’s Grenwis. “Delta has stepped up to partner with many of our customers, offering guidance and support as they convert their equipment to manufacture the products and parts in demand due to market volatility. Laser diecutting, automated changeovers via barcode and precision placement of RFID tags are becoming common upgrades for our customers.”
Delta ModTech has followed the trends when designing its newest products. The company has discovered a greater need for a flexible system and shorter lead times, leading to the development of the Crusader Flex. “This system offers all the reliability and precision of our original Crusader Converter with room for additional cutting, nipping and slitting stations, winding spindles and idlers for the ultimate flexibility,” adds Grenwis. “This is the perfect solution for contract converters and label converters who want to grow their business and expand into new markets with limited risk and increased time to market.”
As Anderson & Vreeland’s Teachout notes, any task that is predictable or repeatable can be automated. Automation will help converters increase efficiency, especially as the industry becomes more of a science by the day. He says, “From automated, cloud-based software and workflow solutions to complete plate processing technologies, our customers and partners have not slowed in investing. They have been put in a position with current industry trends and labor shortages to invest in efficiencies and automation. This will, in turn, be more repeatable regardless of workforce skill, increase throughput and reduce operational costs,” Teachout explains.
Automation will also be key in alleviating some of the pressure presented by the workforce challenge that is ever-present in manufacturing facilities.
“By investing in new technology and moving more toward automated processes, businesses in our industry will have to rely less on people and more on the technology of their equipment,” states McKay. “While most companies recognize the importance of people in a business, investing in new technology puts these manufacturers in a position to have an employee that is always on time, always produces quality work, and never complains or asks for more.”
“Advances in automation are finally making their way to the converting production floor, abetted by the recent acute shortage of labor,” adds Epson’s Gomez. “When skilled pressmen are retiring and even young trainees are hard to find, driving labor out of any process is a must. Humans are not great at repetitive tasks to begin with, so investing in automating repetitive, simple or tedious tasks is a good allocation of resources.”
This technology is becoming more advanced by the day, too. Delta ModTech is seeing a demand for less hands-on operation of the equipment and more smart controls for quick changeovers.
“An increased demand for live machine analytics and reporting has pushed the development of new tools that we can’t wait to share with our customers,” says Grenwis. “You won’t need to be at the machine to know what your production yields are or to know when you’re nearing maintenance intervals, the machine will tell you. These are very exciting times for machine builders.”
By Rock LaManna
Close fighting involves hands, elbows, knees, a headbutt, and maybe a knife or stick. Mid-year, we’re already bare knuckled to get deals through for our clients. We warned you things would change in the buy-sell arena. If it looks calm, it’s because everyone wants to sit back, take a breather, recalibrate, and see how interest rates will affect the economy and borrowing power. Not us. This is where experience makes a difference. We know exactly what these conditions mean.
I’m going on record. It’s a buyer’s market. If that scares you as a seller, it should. The fear is real. Don’t ask if the market is softening. Of course it is. Don’t ask if you can get a multiple of over 8. If you’re a power player, sure. Otherwise, you’re getting a multiple of 6 or even 4x EBITDA if you’re merely average.
“But my buddy at TLMI said label businesses are getting multiples of 14,” you sputter.
Multiples of 10, 12, 15 – you don’t qualify for that game. What you can get for your business is why owners come to us for valuations and strategy. Remember the 3 T’s? Trust, truth (transparency), and timeline. You need all three to make the right decisions about your business.
As for the timeline, it will take 3-5years before the winds blow again from the sell-side. Do you have the runway to make it in five years? What will your business look like? Most of all, what will you look like?
For now, the sweat you’re smelling is from deal movement, private money, PE, family offices, and buyers mid-deal, all rushing to close the solid deals and walk away from the risky ones. They’re monitoring the cash situation, locking in commitments, bringing in execution and integration teams, and booking all the slots on the appointment calendars. These buyers will decide which sellers get chosen for this round and which are locked out.
Let’s talk about pricing. A historically strong (3+ years) business with evidence of growth potential will sell at the top of its range in any economy. Soft prices are for companies being groomed and marketed the old-fashioned way, which is no way at all. That’s a sucker’s game.
How is our game played?
Buyers come to us – hot to the ring – and we hand-match them with the right seller. They’re interested in something a talented acquirer can grow. They want a company with the culture and discipline to integrate successfully, an upward trend in high-margin sales, a formal ESG program for sustainability, and a game plan with incentives for meeting regulatory requirements.
Finally, and this is huge in today’s employment landscape, they’re looking for companies with good people who will stay on during and after the sale. The days of employees waiting to see how things turn out? That’s over. People at every level are jumping ship when they get a whiff that a business is on the market. That’s why our process with sellers is confidential.
It takes off-market conversations to make these matches. Buyers eagerly return our calls when we can make quiet CEO-to-CEO introductions and bring them sellers who won’t flinch.
Speaking of phone calls…
Our relationships with PE are intensifying. They want more frequent status updates. Some are calling us daily because they need to report back to shareholders. On their plate: rolling up multi-deal packages, propping open the deal window, assessing risk-reward, monitoring funding allocations, addressing valuation gaps, and watching the countdown timer.
Meanwhile, sellers are also calling us daily, wanting to know updates on multiples. This isn’t the stock market. There’s no daily ticker. If you’re serious about selling, we can get you in top form to enter the ring. We can amplify your strengths and develop your weaknesses. On the other end of the spectrum are owners who think they can do it alone or enter the arena in puny condition. For them, the ticker only goes down.
What will throw you off in 2022? Your cash situation. Banks not giving you the time of day. Lack of liquidity. Sellers are especially concerned about real estate, especially if it’s a significant percentage of their portfolio. We can introduce you to straight shooters who will prepare a pro forma with today’s comparables. Don’t listen to real estate gurus who hedge their bets in a changing economy. You want someone who has the right connections. Our sector is still in favor in M&A, but we know opportunities will tighten. Buyers and investors still like labels, packaging, and certain wide-format categories. PE and platform buyers like food labels and packaging, food tech, specialty packaging and distribution. Geography still counts. Why do deals fail in 2022? I see it again and again. Lawyers. Partners. Spouses. Family. Yourself.
What can you do?
Increase sales, improve margins, master the supply chain situation, and achieve operational efficiency. To attract the best buyers, you must demonstrate a potential for profitable sales and strong financial performance.
When you’ve been in the game long enough, you know you don’t slow down when the dynamic is shifting. Fighting close means being observant and taking a few punches. If you’re not in the ring, you’re a spectator.
Sell in six months or five years – but you need someone who has been in the fight and isn’t intimidated by buyers. The gloves are off. We’re feeling loose. Experience, connections and perseverance matter.
Welcome to the Buyer’s Arena.
As has been deftly noted by many, this is a resilient industry that has learned how to pivot on a dime. The wide range of obstacles impacting the industry has not translated to doom-and-gloom predictions. In fact, many remain optimistic as growth continues to surge.
“While the industry is undeniably still facing challenges, we have a positive outlook for 2022,” explains Michael Degus, SVP, marketing and business development, Resource Label Group. “Demand remains strong and the trends afford continued opportunity. For example, SKU proliferation is still driving digital growth as companies continue to try to differentiate in a competitive market. In addition, shrink continues to be one of the fastest growing label technologies in key markets. We are also seeing expansion into flexible packaging for narrow web converters who are using hard assets to take on shorter runs.”
“The state of the industry is extremely robust and healthy,” states Paul Teachout, narrow web business development manager, Anderson & Vreeland. “Even with continued supply chain issues, pricing pressures and workforce concerns, converters and suppliers both have continued to move the needle. Equipment sales and M&A activity have not slowed, showing that the climate for organic or growth-by-acquisition is still thriving. We continue to hear that converters and suppliers alike are having very successful year-over-year returns through an ever-evolving environment.”
When it is said that the industry has never before seen times like these, it is not hyperbole. Both converters and suppliers have been tasked with on-the-fly changes – from remote servicing to modified schedules. Those challenges associated with the pandemic have extended into extreme supply chain constraints, which have been a source of consternation for so many. Additionally, the Finnish Paperworker’s Union strike that impacted UPM Raflatac added to these challenges.
“We have never experienced a year like 2021 and 2022,” states Leslie Gurland, executive vice president of global sales and marketing, Lux Global Label. “Price increases, extended lead times and material allocation have plagued the industry.”
“We all had to take a deep dive into our resources and capabilities to ensure we could strengthen our position to support our customers and partners through a difficult time,” says Teachout. “We were very fortunate to be slightly ahead of the game, having seven fully stocked distribution centers ready to go, our RFID Vendor Managed Inventory systems in place to reduce foot traffic in customers facilities, and having great partners to work with to manage price increases and supply.”
The challenges have not amounted to a drop in business, though. For many converters, the obstacle has been navigating delays in supply fulfillment necessary to quickly turn around orders.
“The North American label market has had historic levels of growth, typically seen over many years compressed down into a matter of just over one year,” comments JC McKay, VP of business development, FLAG (Flexo Label Advantage Group). “Contributing factors include an increase in consumer demand and spending beyond what anyone could have ever predicted, and with the pandemic many experts are predicting a fast approach to the next financial crisis.”
The same holds true for suppliers, as well. “We have had a good year,” says Dave Grenwis, marketing manager, Delta ModTech. “We are experiencing growth as label converters are expanding and looking for more flexible converting systems to help them succeed in new markets such as RFID and medical industries.”
E-commerce has played a big role in the landscape of label and package printing. While this sector was already trending upward prior to 2020, the pandemic contributed to a seismic boom.
The pandemic caused other behavior shifts as well, as Victor Gomez, director of industrial labels, Epson America, notes. While he anticipates continued success for the industry, he cautions mindfulness as the industry reacts to current and future challenges. “Right now, we may be too busy getting work out the door and locating sources of media supply to notice that another shift is underway,” says Gomez. “The label boom we’ve been living through has come largely from consumers staying home, ordering products online and shopping at supermarkets rather than eating out at cafeterias or restaurants. As more people drive to work again or begin going out, traveling for vacation or business, the balance of consumer spending on products and services is starting to shift again. This is happening just as the federal direct subsidy ends and prices are rising at a rate not seen in 40 years. As a result, we should wonder at what point the consumer dollar will start to buy fewer products that require a label.”
There are a number of steps converters can take to plan ahead for the future. Communication is key throughout all levels of the supply chain, and testing additional materials and conducting inventory planning are key as well.
“We have navigated the challenges through transparent communication with our customers, suppliers and employees,” notes Gurland. “We strive to follow one of our key guiding principles – a sense of urgency in everything we do. We have to stay laser-focused in everything we do. We also have longer visibility of our customers’ forecasts, and we’re trying to increase the number of material options for availability and cost containment strategy.”
According to McKay, suppliers and converters have had to innovate like never before in response to recent events.
“Suppliers and converters have needed to pivot their business directions and get creative as to how to alleviate the shortages and continue driving business forward,” he explains. “This has led to qualifying alternative materials with customers, resetting lead time expectations, moving from what used to be a just-in-time environment to now weeks and even months, or even turning away new business. The industry will continue to demand innovation and the ability to change amongst both converters and suppliers. The difference between success and failure will be defined by a company’s ability to think forward.”
How a company navigates the supply chain will be imperative in the future. Epson, for example, boasts redundancy in its manufacturing operations and a diversified product portfolio across consumer, professional and industrial products. The company’s operations allowed for a better response, which matches its expectation for the future.
“Because we make all our own critical components – such as printheads and ink – we have more control on our supply chain than most competitors,” says Gomez. “But we do have to work through issues that affect everyone, like port congestion and container allocations. I must point out that, beyond keeping a healthy supply of consumables, we have not jumped on the bandwagon to raise prices on Epson SurePress or ColorWorks ink. Instead, we are doing everything possible to maintain a predictable TCO for our label customers.”
Plus, association involvement has been critical for many. From FLAG and FTA to TLMI, collaboration and the sharing of best practices are not just luxuries when dealing with these unprecedented challenges – they’re a necessity.
“For independent converters, all of these challenges have required them to think forward and find leverage every way they can,” adds McKay. “FLAG members have found an advantage amongst themselves in that they’re able to share best practices, innovate and strategize together around ways to overcome the supply chain challenges and ultimately make their businesses stronger as a result.”
Doug Horn leads the packaging domain for Clairvest, a top private equity firm that partners with entrepreneurs to help them build successful businesses. He recently sat down with L&NW to provide his view of the label and package printing landscape.
L&NW: How would you characterize the state of the label industry in 2022?
DH: I think we are in a Goldilocks moment – not too hot, not too cold. There has been a surge in interest in the labels segment over the last couple of years – nearly every major label company has traded hands and is now under new ownership. The industry is very attractive thanks to its exposure to consumer staples. However, the resiliency of the segment has and continues to be tested by inflation and the need to increase pricing, restocking and destocking from end consumers, supply chain risks, labor availability, and machine lead times.
L&NW: What impact has M&A had on the label and packaging industry?
DH: The rate of consolidation has accelerated in recent years driven by global players and private equity-funded platforms. More than 80% of the top 100 label converters from 2000 are no longer independent. The biggest impact is that we are seeing both mid- and large-size label companies take market share from smaller independents as these larger companies tend to be better capitalized to invest in automation, management, sales and operational bench strength, and M&A.
L&NW: How have the many challenges associated with the pandemic/supply chain affected M&A activity, and what are your predictions for the future?
DH: The fallout from the pandemic and the supply chain constraints has intensified M&A interest from my discussions with privately-owned companies. We are seeing some of the mid-size players re-energize their interest in M&A as both an offensive and defensive tool – not only to diversify and grow their revenues but also to access different geographic labor markets and gain buying power with their suppliers.
Likewise, the market volatility has whipsawed some of the smaller companies in the space. It has brought forward their intentions to sell given the stresses of the last few years.
L&NW: What are the benefits for converters partnering with private equity firms?
DH: We are big believers that independents can still win in this industry. It’s still a very local/regional business, where outstanding customer service matched with capability is a differentiator.
We typically buy into companies alongside entrepreneur owners who are looking for a private equity partner – not as part of their retirement plan – but to help them gain scale with sourcing and funding add-on acquisitions, investing in new equipment and automation tools, building out their teams and generally providing strategic guidance on their
growth journey.
L&NW: In addition to M&A, what other trends are you seeing in this space?
DH: The value proposition for the higher end label companies continues to center around quick turnaround times, smaller order batches, sustainability and digital capabilities. Companies that can master some or all of these elements are poised to grow at 2-3x the industry growth rate over the coming years.
Also, we are seeing customers looking to make their supply chains less fragile – which means a subtle move toward a greater number of suppliers where price is still important but reliability even more so.
Lastly, ESG is top of mind for all industry players driven by the targets put forward to the market by the brands.
The hot M&A market
Mergers and acquisitions have been a constant in recent years. While M&A activity has been characteristic of this sector, it has been as active as it’s ever been. Resource Label Group, which recently announced its 23rd acquisition with QSX Labels, expects the M&A activity present in the label and package printing industry to continue ramping up, especially as challenges present themselves.“Scale will become more important due to the significant investment needed to compete with state-of-the-art technology and the economic benefits in raw materials, operations, and security of supply,” explains Resource Label Group’s Degus. “We also see a growing customer trend to consolidate suppliers to simplify their supply chain, ensure consistency in packaging, and capitalize on economies of scale. Given this, there is a need for owners considering a succession plan to look to the future. Multiples have been at historic levels, but rising interest rates and an impending recession will start to push multiples and valuations down.”
“When the pandemic hit, I expected a wave of M&A activity to sweep over the industry as it did after the 2008 financial crisis,” states Epson’s Gomez. “But the relentlessness and endurance of the consolidation has surprised me. There was more investment capital waiting to pounce on opportunities in our thriving industry than I expected.”
The impediments created by the Covid-19 pandemic and the pressures on day-to-day operations could push business owners to rethink timing when selling. The industry is also reaching a critical time where generational changes and succession planning are top-of-mind for so many.
For many companies, especially smaller and mid-size label converters, M&A opens doors. “Mid-size companies with the right assets and mindset can gain low hanging fruit from the larger players in the market,” says Lux Global Label’s Gurland. “For example, Lux is mid-size with the capabilities of the larger organizations but the speed and agility of a small company. We continue to obtain new clients because we can offer cutting-edge products, speed to market and truly personalized service.
“Smaller companies can become part of PE-backed groups that can provide them with resources to compete with the mid-size companies in a way that they couldn’t before,” she adds.
According to Anderson & Vreeland’s Teachout, we are currently living in the “Generation of Consolidation.” This activity, he notes, has changed the industry’s landscape. “Twenty years ago, we dealt with mostly private owners and single rooftops. This is no longer the case,” he adds. “Current economic trends show things are starting to shift, but the M&A activity is still brisk and shows no signs of slowing. We are a very attractive, resilient industry that provides essential services to a global audience. I feel the pandemic only exposed this more, and the investment in our industry has created untapped potential.”
Many label converters have opted to enter the private equity world to leverage the assets of the buying group. With the continued supply chain challenges, having that access should alleviate some pressure.
“For 2022, supply reliability and response times will continue as the biggest challenges,” notes Degus. “An inconsistent and unstable supply chain, coupled with strong inflationary pressures, will force us to constantly work toward how we can alleviate the strain for our customers. It will be critical for buyers to partner with a company that has the resources and capabilities to navigate this challenging situation.”
This was a distinct advantage for Resource Label Group’s vast label family. “At a challenging time like this, scale provides a lot of benefit in the label industry,” Degus adds. “With coast-to-coast operations, we had the flexibility to move and share materials and orders between facilities. We worked collaboratively with our strategic suppliers to develop order management programs to effectively manage the uncertainty and instability in the supply chain.”
For inquiring minds at many leading label converters, M&A is not necessarily a slam dunk, though. There are risks involved, notes FLAG’s McKay.“It’s hard to say whether or not M&A has made a positive or negative impact on the packaging industry,” he notes. “The large consolidators continue to get bigger, leaving independent converters in even more of a challenging environment. Typically, when a label converter sells to a larger company, they are told that business won’t change, they’ll operate similarly to before, and the team that’s in place will remain. If luck is on their side, all of these things are true and the shop is kept open and allowed to operate as usual.
“The majority of these acquisitions, however, are made with the intention of providing investors a significant return,” adds McKay. “With that comes increased corporate accountability and pressure for bottom- line results. Unfortunately, in a worst-case scenario, the facility is closed with only the book of sales going to the acquiring entity.”
M&A activity can have an effect on the sales cycle, too, as Epson’s Gomez explains: “Decision making is often removed from each acquired site – where long-term relationships were forged – to an impersonal home office,” he details. “Consolidations can also cause personnel turnover among influencers or decision makers, which tends to delay investment decisions.”
Spotlight on Sustainability
While there was a lull in interest at times over the last decade, sustainability is squarely in the crosshairs throughout all levels of the supply chain. From brands to converters, sustainability has become a must-have versus a nice-to-have.“Sustainability continues to be one of the pillars of our industry,” states Anderson & Vreeland’s Teachout. “Everyone is on board in reducing our overall environmental impact and carbon footprint. I see so many facilities now that have achieved landfill-free operation and sustainable certifications.”
As companies make sustainability a priority, it must be noted that environmental practices start at the top – and they must be prevalent throughout an organization.
“Sustainability is very top-of-mind for us as a company and is quickly becoming a requirement for conducting business. More importantly, though, it is just the right thing to do,” remarks Resource Label Group’s Degus. “To be successful, it was critical to us that sponsorship of such an important initiative started at the executive level. We have implemented structural programs that support ESG and provide the data needed to monitor KPI’s. We have dedicated key personnel and resources to support our efforts in this area. Our goal is to make sustainability a key part of the Resource Label Group culture.”
Sustainability has tremendous momentum in our industry. More companies than ever are seeking APR certification, and the establishments of organizations like CELAB add to the industry’s insistence on solving these key challenges. It is no longer an option to put one’s head in the sand.
“We are working with all of our suppliers to find the best materials, trends and solutions that have real merit in the sustainability and recyclability space,” notes Lux Global Label’s Gurland.
From the association standpoint, FLAG’s McKay has seen commitments to sustainable operations and the consumption of fewer resources, waste recycling as a new resource, the reduction of the operation’s overall carbon footprint, accountability from external organizations, such as FSC and PEFC, and a rising awareness driven by the market to full spectrum sustainability.
“Most of the suppliers in the label industry are driving initiatives within their organizations to promote sustainability, hold themselves and their teams accountable, support their converter customers with new sustainable opportunities and more,” explains McKay. “While brands and end users strive to have 100% sustainable products, costs have typically proven to be higher than traditionally non-sustainable converted products. The higher costs are creating new challenges for these brands and end users, sometimes even forcing them to turn back on their original sustainable initiatives. Though sustainability has its challenges, as it evolves, I believe the industry as a whole has taken tremendous strides toward a better future for label manufacturing and the planet.”
Brands have been instrumental in this shift, too. According to Degus, Resource Label Group’s customers have become more discerning than ever when it comes to environmentally friendly practices and materials. “Our goal is to take a consultative approach and guide customers through these hard to navigate topics,” he says. “We encourage them to involve us early in the process to avoid any issues that might result with end-of-life impacts. Our customers have more questions than ever, ranging from very simple to extremely detailed. We encourage them to pull us into the conversation early to ensure they are headed down the right path. Sustainability is a full packaging discussion – our responsibility does not start and stop with just the label. We recognize that sustainability is constantly evolving, and we remain highly committed to investing in the people, technology and capabilities to help our team and customers on the journey.”
The substrate point of view
Paper supply has been a hot topic in the industry this year. Tina Hart, VP of sales, Avery Dennison Label and Packaging Materials, says the industry is starting to see some relief as the mills begin to ramp up production. She does, however, concede that the start of 2022 was “a rocky one.” However, the challenges with materials were not solely linked to the Finnish strike. According to Avery Dennison and UPM Raflatac, the issues predated the standoff.“What got lost a bit in the news about the Finnish Paperworkers Union strike was that in North America, we are facing a structural supply shortage when it comes to paper materials,” explains Tim Kirchen, senior vice president, Americas region, UPM Raflatac. “Currently, there is not enough paper material made in North America to fulfill all the demand for paper materials, especially if we look at packaging, graphics, and label-related paper raw materials. Just in the last two years, we have seen a reduction of 3.5 million tons of coated and uncoated paper capacity locally due to mill closures and production diversion. At the same time, we have seen unprecedented growth in our industry.”
Following the conclusion of the strike, Kirchen estimated it would take 8-12 weeks for materials to make their way to North America. That timeframe lines up with the mid-year point of 2022. “We will continue to work tirelessly with our domestic and global suppliers to secure materials necessary to respond to the structural demand growth in our industry,” adds Kirchen. “I am very optimistic that future supply chains can be more robust.”
“The immediate problems of media supply create a bottleneck because expanding production capacity becomes harder to justify when suppliers are not taking new customers and are placing existing ones on allocation,” adds Epson’s Gomez. “This temporary situation affects the timing of some buying decisions.”
When dealing with these challenges, suppliers have emphasized the importance of communication and transparency with their customers. This has been especially true with substrates.
“Our first priority has been to protect as much of our customers’ business as possible through alternative liner materials and allocation,” says Hart. “We have tried to be as transparent as possible with customers regarding the ever-changing and continuously challenging supply chain situations and inflation over the last two and a half years. We continue to focus on internal productivity to help keep costs under control.”
The future of this industry will focus on the uncertainty of inflation but also service as customers look to manufacturers for improved lead times and fewer allocation restrictions. Even with the paper strike in Finland resolved, it will take some time for supply and lead times to normalize.
“The strike in Finland had such a major impact on the industry because paper supply was already very tight, with overall paper production capacity shrinking in the years leading up to the strike and demand at an all-time high,” says Hart. “In the long term, as an industry we still need to solve the supply chain challenges we face. Avery Dennison is looking at strategic investments, partnerships and opportunities in sustainability and circularity, as well as raw materials. Product innovations, which have taken a slight backseat over the last seven months, will again take the forefront as we expect to see many manufacturers launching new products and solutions.”
Technological revolution
The newest products and technologies hitting the market have been marked by increasingly automated capabilities, faster speeds and modularity, leading to enhanced print quality. These new developments will be highlighted at Labelexpo Americas, which is slated for September 13-15, 2022, in Rosemont, IL. At the event, converters will increasingly look to add new products to their facilities in order to optimize their efficiency.“Over the last couple years, most label converters continue to see massive growth in their businesses,” says FLAG’s McKay. “Suppliers are also in a position to see expanded growth as a result of investing in new technologies. Whether it’s a new press, conventional or digital, finishing equipment, prepress plates or information technology platforms, the adoption of new technology has almost been required to keep up with these growing markets.”
Label converters, by and large, are still willing to invest in the newest, cutting-edge products – as long as it makes sense for their business. In many cases, the latest automated functionality has the potential to alleviate some of the constraints caused by the workforce challenges common in the manufacturing space.
“Our company remains highly committed to investing in the right technology at the right time,” says Resource Label Group’s Degus. “The current environment has made this even more critical as customers are requiring more innovative, cost-effective solutions to meet their growth strategies. Our ability to have access to the right technology will be vital to being a good partner and helping our customers win. We firmly believe if you stop investing and innovating you are destined to fall behind.”
“Data is power,” adds Lux Global Label’s Gurland. “The use of BI tools allows you to share information that empowers your employees and supports your customers. Over the last four months Lux has focused on connectivity through Microsoft Teams in a way that has truly transformed the way we manage projects and communication. Our employees are embracing it and are excited about this endeavor. This will only continue to get better.”
This has been evident from the manufacturer side, too. “Many of our customers are willing to grow and expand, and they are embracing the need to change,” explains Delta ModTech’s Grenwis. “Delta has stepped up to partner with many of our customers, offering guidance and support as they convert their equipment to manufacture the products and parts in demand due to market volatility. Laser diecutting, automated changeovers via barcode and precision placement of RFID tags are becoming common upgrades for our customers.”
Delta ModTech has followed the trends when designing its newest products. The company has discovered a greater need for a flexible system and shorter lead times, leading to the development of the Crusader Flex. “This system offers all the reliability and precision of our original Crusader Converter with room for additional cutting, nipping and slitting stations, winding spindles and idlers for the ultimate flexibility,” adds Grenwis. “This is the perfect solution for contract converters and label converters who want to grow their business and expand into new markets with limited risk and increased time to market.”
As Anderson & Vreeland’s Teachout notes, any task that is predictable or repeatable can be automated. Automation will help converters increase efficiency, especially as the industry becomes more of a science by the day. He says, “From automated, cloud-based software and workflow solutions to complete plate processing technologies, our customers and partners have not slowed in investing. They have been put in a position with current industry trends and labor shortages to invest in efficiencies and automation. This will, in turn, be more repeatable regardless of workforce skill, increase throughput and reduce operational costs,” Teachout explains.
Automation will also be key in alleviating some of the pressure presented by the workforce challenge that is ever-present in manufacturing facilities.
“By investing in new technology and moving more toward automated processes, businesses in our industry will have to rely less on people and more on the technology of their equipment,” states McKay. “While most companies recognize the importance of people in a business, investing in new technology puts these manufacturers in a position to have an employee that is always on time, always produces quality work, and never complains or asks for more.”
“Advances in automation are finally making their way to the converting production floor, abetted by the recent acute shortage of labor,” adds Epson’s Gomez. “When skilled pressmen are retiring and even young trainees are hard to find, driving labor out of any process is a must. Humans are not great at repetitive tasks to begin with, so investing in automating repetitive, simple or tedious tasks is a good allocation of resources.”
This technology is becoming more advanced by the day, too. Delta ModTech is seeing a demand for less hands-on operation of the equipment and more smart controls for quick changeovers.
“An increased demand for live machine analytics and reporting has pushed the development of new tools that we can’t wait to share with our customers,” says Grenwis. “You won’t need to be at the machine to know what your production yields are or to know when you’re nearing maintenance intervals, the machine will tell you. These are very exciting times for machine builders.”
By Rock LaManna
Close fighting involves hands, elbows, knees, a headbutt, and maybe a knife or stick. Mid-year, we’re already bare knuckled to get deals through for our clients. We warned you things would change in the buy-sell arena. If it looks calm, it’s because everyone wants to sit back, take a breather, recalibrate, and see how interest rates will affect the economy and borrowing power. Not us. This is where experience makes a difference. We know exactly what these conditions mean.
I’m going on record. It’s a buyer’s market. If that scares you as a seller, it should. The fear is real. Don’t ask if the market is softening. Of course it is. Don’t ask if you can get a multiple of over 8. If you’re a power player, sure. Otherwise, you’re getting a multiple of 6 or even 4x EBITDA if you’re merely average.
“But my buddy at TLMI said label businesses are getting multiples of 14,” you sputter.
Multiples of 10, 12, 15 – you don’t qualify for that game. What you can get for your business is why owners come to us for valuations and strategy. Remember the 3 T’s? Trust, truth (transparency), and timeline. You need all three to make the right decisions about your business.
As for the timeline, it will take 3-5years before the winds blow again from the sell-side. Do you have the runway to make it in five years? What will your business look like? Most of all, what will you look like?
For now, the sweat you’re smelling is from deal movement, private money, PE, family offices, and buyers mid-deal, all rushing to close the solid deals and walk away from the risky ones. They’re monitoring the cash situation, locking in commitments, bringing in execution and integration teams, and booking all the slots on the appointment calendars. These buyers will decide which sellers get chosen for this round and which are locked out.
Let’s talk about pricing. A historically strong (3+ years) business with evidence of growth potential will sell at the top of its range in any economy. Soft prices are for companies being groomed and marketed the old-fashioned way, which is no way at all. That’s a sucker’s game.
How is our game played?
Buyers come to us – hot to the ring – and we hand-match them with the right seller. They’re interested in something a talented acquirer can grow. They want a company with the culture and discipline to integrate successfully, an upward trend in high-margin sales, a formal ESG program for sustainability, and a game plan with incentives for meeting regulatory requirements.
Finally, and this is huge in today’s employment landscape, they’re looking for companies with good people who will stay on during and after the sale. The days of employees waiting to see how things turn out? That’s over. People at every level are jumping ship when they get a whiff that a business is on the market. That’s why our process with sellers is confidential.
It takes off-market conversations to make these matches. Buyers eagerly return our calls when we can make quiet CEO-to-CEO introductions and bring them sellers who won’t flinch.
Speaking of phone calls…
Our relationships with PE are intensifying. They want more frequent status updates. Some are calling us daily because they need to report back to shareholders. On their plate: rolling up multi-deal packages, propping open the deal window, assessing risk-reward, monitoring funding allocations, addressing valuation gaps, and watching the countdown timer.
Meanwhile, sellers are also calling us daily, wanting to know updates on multiples. This isn’t the stock market. There’s no daily ticker. If you’re serious about selling, we can get you in top form to enter the ring. We can amplify your strengths and develop your weaknesses. On the other end of the spectrum are owners who think they can do it alone or enter the arena in puny condition. For them, the ticker only goes down.
What will throw you off in 2022? Your cash situation. Banks not giving you the time of day. Lack of liquidity. Sellers are especially concerned about real estate, especially if it’s a significant percentage of their portfolio. We can introduce you to straight shooters who will prepare a pro forma with today’s comparables. Don’t listen to real estate gurus who hedge their bets in a changing economy. You want someone who has the right connections. Our sector is still in favor in M&A, but we know opportunities will tighten. Buyers and investors still like labels, packaging, and certain wide-format categories. PE and platform buyers like food labels and packaging, food tech, specialty packaging and distribution. Geography still counts. Why do deals fail in 2022? I see it again and again. Lawyers. Partners. Spouses. Family. Yourself.
What can you do?
Increase sales, improve margins, master the supply chain situation, and achieve operational efficiency. To attract the best buyers, you must demonstrate a potential for profitable sales and strong financial performance.
When you’ve been in the game long enough, you know you don’t slow down when the dynamic is shifting. Fighting close means being observant and taking a few punches. If you’re not in the ring, you’re a spectator.
Sell in six months or five years – but you need someone who has been in the fight and isn’t intimidated by buyers. The gloves are off. We’re feeling loose. Experience, connections and perseverance matter.
Welcome to the Buyer’s Arena.