IMI Europe held its first ever Mergers & Acquisitions Forum at its Digital Print Europe event in Barcelona, Sept 2017. The forum was chaired by Dr Kenneth Stack of Proximus LLC, an experienced M&A practitioner with many years in the industry. The intention was to give an overview of the extensive M&A activity in the inkjet industry, the reasons for this and the thinking behind it. It was aimed not just at people interested in buying or selling, but also for people interested in the industry landscape that is leading to this activity. The forum put together a great line-up of experts to explain the situation.
Marco Boer, Vice President of IT Strategies, gave an overview of the market forces driving acquisitions in the industry. The key issues are a slowing in growth in key markets for the large players, coupled with the view of newer opportunities in markets outside their area of expertise. The pressure to maintain growth levels in listed companies leads to the need to achieve sales growth by acquiring growing companies of the right type, if organic growth cannot be continued. Companies such as EFI have built a business strategy around this.
Ken Stack then gave an overview of the deal process, from his perspective and experience as a facilitator on both sides of significant deals. This included some definition of terms, a review of recent deals, the valuations and motives behind these deals, some advice for companies considering acquisition, and some final thoughts. Attendees learned the difference between ‘unicorns’ and ‘pearls’, along with much other valuable information. We also understood that deals peaked in 2016, and have been focussed on ink and dispersions, mainly in Europe, in recent times. Dover Group and EFI have clearly been the major acquirers in the last few years, but many other companies have made acquisitions, with a total of 38 deals transacted since 2012. The problem of valuation was discussed in detail, with some examples of deal types used as case studies.
The forum was then treated to the views of the two major acquirers, EFI and Dover Group. Liz Logue of EFI described how their strategy of leading the transition from analogue to digital has led to consistent growth over the last six years, with a focus on industrial inkjet due to key acquisitions in ceramics and textiles, and an interest in inks and software as well as systems. Liz described how EFI views acquisitions and the process and metrics used to ensure a good return on investment. James Hirchak of Dover gave an overview of their view of the market, with strong interest in the coding and marking and textiles markets with acquisitions of Markem Imaje, MS, JK Group and Caldera in recent years. James gave advice to potential sellers, and described how the acquisition process varies depending on the seller for example between MS (family owned), JK Group (owned by a private equity firm) and Caldera (owned by an individual).
Piero Pierantozzi of Mouvent then gave a very interesting overview of his experience as a serial seller of businesses, and some frank views about what he feels works (and does not work!) for entrepreneurs. The forum culminated in a fascinating panel discussion with views from the buy and sell side, with provocative questions from Ken Stack. Finally there was the chance to exchange views and information with a reception over drinks!
Based on the level of interest in the M&A Forum in Europe, we have decided to add a short version of the event to our Digital Print Japan event in Tokyo, on 6th December 2017, the morning after the IT Strategies Executive Conference. We look forward to welcoming you there.