http://www.paper.com.cn 2023-05-25 Global Printing and Packaging Industry
Despite a decrease in transaction volume in the broader intermediate market, M&A activities in the packaging and printing industry have significantly increased in 2022. The growth of M&A activities is mainly attributed to several key factors – the elasticity and stability of the packaging and printing industry, the rise of e-commerce driving an increase in demand for packaging and printing solutions, the continuous expansion of global trade, and the growth of emerging markets.chocolate cake from box recipes
Recently, Scott Daspin, Director of Investment Banking at Triad Securities, and Paul Marino, Head of Private Equity at Sadis&Goldberg, shared their professional knowledge and insights on the past, current situation, and prospects of the packaging and printing industry.regular cigarette case
Both have extensive industry knowledge and experience. Daspin has a rich history in developing new relationships and identifying and completing successful transactions, while Marino focuses on practical aspects of financial services, corporate law, and corporate financing, providing valuable insights on industry trends, packaging and printing industries, and their impact on future M&A activities.gudrun chocolate box
Private equity accounted for nearly 54% of transactions in the packaging and printing industry in 2022. Why?
Marino: Given the continued importance of packaging printing, it is not surprising that capital has been attracted to this industry. Many intermediate market operators are family owned, which helps improve efficiency. Investors recognize the value and growth potential of industries serving a wide range of industries, from food and beverages to consumer goods and pharmaceuticals.life box chocolates
Do private equity companies use any strategies to create value and achieve growth?
Daspin: Private equity companies have left their mark in the packaging and printing industry by using a “buy and build” strategy. This involves acquiring a combination of companies in the same or related industries, and then integrating and merging them to create larger, more efficient, and more competitive businesses. Due to the dispersion of the packaging and printing industry, there are more small and medium-sized enterprises, while there are fewer large-scale enterprises. Investors can acquire multiple companies and integrate them to achieve greater economies of scale, reduce costs, and generate higher profits.
What are the trends worth paying attention to as 2023 will test the anti recession concept of the packaging and printing industry?life is a box of chocolate
Marino: Newton’s third law of motion points out that “for every action, there is an equal and opposite response.” This concept is similar to the business cycle. In the past two years, the excessive prosperity of the epidemic has been balanced by the extremely pessimistic outlook for 2023.life is chocolate box
However, macroeconomic uncertainties are likely to have a significant impact on the packaging industry in the coming year. Given ongoing political tensions, shifting global trade policy, and an uncertain economic outlook, many companies may choose to delay investment and reduce spending on packaging. This may lead to slower demand for packaging materials, affecting the growth of the industry. Additionally, if businesses start to be cautious with their budgets, they may turn to cost-saving packaging solutions, which may challenge the innovation and development of new packaging printing technologies.valentines box of chocolates
However, history suggests that the packaging and printing industry should remain resilient. The rapid growth of e-commerce and the resulting increase in home delivery will drive the demand for innovative packaging solutions that protect and preserve products during transit.best chocolate boxed cake mix
Additionally, as consumers become more aware of the environmental impact of packaging, the demand for sustainable packaging materials and solutions will grow. The continued expansion of global trade and the growth of emerging markets will create new opportunities for the packaging industry to serve a wider range of customers and industries.
Do some of the deals you have been involved in in the past year have anything in common?
Daspin: Most of my packaging printing deals involve family businesses that are both profitable and financially self-reliant. The typical homeowner is either looking for a way to transition into retirement or simply looking for an opportunity to cash in, and sellers typically have 85% or more of their net worth tied to their business.valentines box of chocolates
Interestingly, the highest bidder is not always the best solution: Sellers often prioritize working with buyers who will keep the company afloat after the sale. For example, sellers will often reject higher initial bids from financial buyers, preferring to work with private equity-backed strategic buyers who offer less competitive valuations but the opportunity to reinvest some of their equity and remain actively involved Companies, with a path to succession planning. As a result, most of my time in the deal was spent trying to match the seller’s desired outcome with the buyer’s desired outcome that met those criteria.
In 2022, the trend of more U.S. states enacting extended producer responsibility laws continues. What are these laws and what they mean for package printing companies?
Marino: Following actions taken by counterparts in Oregon and Maine in 2021, lawmakers in California and Colorado enacted EPR laws designed to help reduce waste from packaging and containers. These bills, while not identical, require large producers of packaging and containers to cover the costs associated with collecting and disposing of their products. Additionally, they have set goals to encourage producers to use more sustainable packaging and materials. Most of the new laws also require companies to provide information on the recyclability of their packaging and provide collection systems for recycling packaging.best chocolate boxed cake mix
What advice do you have for potential sellers after the transaction closes?
Daspin: Mainly making sure they understand their future role in the company and their responsibilities to buyers. Some business owners may have never worked for anyone before, so it may take them some time to learn about new corporate structures or reporting requirements. Also, since company employees often don’t know about a deal until it’s closed, I recommend that they take the time to understand how the outcome of the sale will affect their employees.preroll king size box
They should also know how to communicate with suppliers and customers after the transaction. A successful trend I’ve seen is extending announcements by 20-30 days so sellers can get their message across before their stakeholders hear it from other sources. I think it’s important to understand what your message is and what you can say to your employees, customers and suppliers.best chocolate cake mix box
Are there any legal issues that must be negotiated in a successful acquisition or sale of a packaging printing company?
Marino: The buying and selling of a business is the most important transaction a business owner can make, rivaled only by initial organization or liquidation. All players involved in financial and legal due diligence have changed dramatically, giving these deals their own drama and complexity. While not specific to packaging exchanges, some items, such as customer, supplier and employee contracts, deserve more scrutiny in the process of buying a packaging company.
Post time: May-30-2023