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The Art of the Acquisition

The right way to buy a rival.



The newspapers, currently full of downbeat economic news, continue to report that even those companies with money to spend aren’t spending it. So it may seem odd to think about buying another company at this point, but even in today’s climate, businesses still need to keep growing. One of the most effective ways to grow a business can be by acquiring another operation-and, for better or worse, this may be a good time to find operations ripe for the buying.

Sometimes, an acquisition can help a business grow by eliminating the competition. For instance, if you’re splitting printing business with another firm and you acquire that firm (plus its accounts), you’ve increased your market share in one fell swoop. And, sometimes, an acquisition can help a business grow by enabling it to extend its product line and attract new clients.

It’s important to remember, however, that an acquisition doesn’t just involve equipment, employees, and client lists. It’s also an acquisition of reputation, public perception, and company culture. These easily overlooked factors can make or break the success of an acquisition.

To explore the process and results of print shop mergers, we spoke with executives at four operations of various sizes about recent acquisitions they made. Here, I’ll describe their experiences as well as what they learned from the transaction. One thing they all agree on: If they had to do it over again, they would, despite the increasingly troublesome economy.

BigInk: Acquiring the competition
BigInk ( in Seattle has been in business since 1991, supplying large-format and digital printing and installation services to corporate, retail, and public-works customers. With a Durst Rho 600 UV flatbed printer, a Gandinnovations Jeti 10-foot solvent printer, a Mutoh 87-inch solvent machine, and two Oce LightJet photo printers-plus assorted laminators, scanners, and other support equipment-BigInk produces display graphics, event signage, murals, window graphics, vehicle wraps, and more from its 23,000-square-foot Seattle facility.

Last July, BigInk acquired Ivey Photo’s business-to-business division, getting a Durst Lambda photo imager, among other equipment, in the deal. “The process started in September of 2007,” recalls BigInk president John Scholl. “Ivey’s senior management came to me and said they were interested in exploring a merger or an acquisition of BigInk. So I said, ‘I’ll sign your nondisclosure if you’ll turn around and sign one for me.’ After I saw what they were proposing, I declined to pursue the merger. But then in December they came back and said they were interested in looking at it the other way.”


Once the deal was done, BigInk moved Ivey’s equipment along with four Ivey employees (giving the firm a total of 26) into its existing plant. “The deal wasn’t done so much to pick up the assets,” explains Scholl, “but it was structured as an asset deal because I didn’t want to pick up their liabilities. So we did pick up some of the equipment, but the big hope in a deal like this is that you pick up some of the employees and accounts along the way. The employees weren’t part of the deal, but I interviewed everyone at Ivey who wanted to be interviewed-about nine or ten total. I didn’t need to fill that many positions, but interviewing them was the right thing to do. We ended up taking four because of the additional work we expected to get; and should business pick up dramatically, I’ve already got people I can talk to about a job.”

In this case, the acquiring company was happy to eliminate the competition. “Ivey was a direct competitor,” says Scholl. “This was an opportunity to take a competitor off the street. I also recognized the value of the announcement to people who buy services. Ivey had been around forever, and the name recognition would help drive business to us.”

BigInk didn’t try to pick up all of Ivey’s business-some came from photographers whose small quantities didn’t fit with BigInk’s core business-to-business focus. But Scholl made sure not to leave those customers high and dry. “I didn’t want them calling and saying, ‘You SOBs, this isn’t fair.’ Maintaining goodwill goes a long way throughout the customer community. So if they called, we were ready with a list of other places they could get what they need.”

Scholl isn’t sorry to have made the deal, even though it hasn’t worked out quite as well as he expected. “I had hoped to get more of their business and revenue out of it. We’ve received some, but not as much as I’d projected. But there’s still one less competitor. And even before our deal, there was another competitor that had folded shop in March 2008. So in the end, essentially I have two fewer competitors in the Seattle market than I did in the beginning of the year. That’s very worthwhile to me. And maybe I didn’t get the customers, but I got some really good employees that I don’t think I would ever have gotten away from Ivey.”

He also appreciates some of the intangible benefits that have come with the deal: “The word on the street is probably the most beneficial aspect,” he says. “It’s not just the business, it’s the ability to use the media to get your message out. It’s also an opportunity to raise your prices. I’m a little more bullish about raising my prices with two fewer competitors around.”

American Screen Art: Finding companies that fit
Knoxville, Tennessee-based American Screen Art ( started in 1955 as a screen-printing company and has moved into digital over the years.


“We serve three markets,” says Dennis Alexander, the company’s chief operating officer. “The first one is the beverage market. We produce the product identifiers for soft-drink dispensers-the headers and side decals-on pressure-sensitive vinyl and on polycarbonate sheet and film for the backlit and illuminated displays. Second, we produce graphics on pressure-sensitive vinyl for the fleet market, including the soft-drink companies plus private and common carriers. And third, we serve the retail market with a wide variety of point-of-sale products, both permanent and semipermanent.”

American Screen Art (ASA) employs an HP TurboJet large-format digital printer, a Leggett & Platt (now Wifag Polytype) flatbed, an HP Indigo small-format digital press, and 5- and 6-color inline screen presses.

In July 2007, ASA acquired the assets of Visual Technologies and Clear Choice Marketing in Monroe, North Carolina. Visual Technologies specializes in “see-through” graphics for point-of-sale and point-of-purchase graphics. The manufacturing operations, along with some of the Visual Technologies staff, were moved to ASA’s site in Knoxville.

“Right now we have about 75 employees,” says Alexander. “There were only a handful of people at Visual-eight, I believe-and we kept three of them.” This was the second acquisition for the company, and in both cases, says Alexander, “we consolidated the manufacturing here. We retained the sales people that wanted to stay with us, and we’ve actually brought an employee or two from the company into the operation. It all depends on the skill set of the employees and our needs at the time.”

“We keep our eyes and ears open in the marketplace for companies that may be a fit for us,” Alexander continues. “With Visual, we knew the principal owners for many years. They approached us regarding an acquisition, and we felt that the product line and customers were a nice fit for our company.”

Despite the iffy economy, Alexander says his company would make the acquisition again. “I think there’s a lot of consolidation going on in the industry,” he says. “There’s an overcapacity in the industry, in my opinion, because we’ve got a lot of new digital technology that’s become more available and affordable, and people who aren’t in the business think they can get into it easily. But I don’t think the market is growing as fast as the capacity of the equipment that’s out there, which causes some businesses to start to flounder or fail. Those businesses may have a particular account that you’re looking for, or a product line that fits into or complements some of the things that you’re doing. With Visual Technologies, it was a case where there was a good fit, the dollars and cents made sense, and the payback looked good. So yes, we’d do it again.”


KDM: Picking up customer base
KDM ( is a large operation in Cincinnati, with some 275 employees. Company equipment includes an Inca digital printer, an HP Designjet 5000 printer, two EFI Vutek solvent ink printers, and more.

With the acquisition of Advanced Digital Graphics of Columbus, Ohio, in November 2008, KDM doubled its capacity and now has 12 digital printers in all. Besides just doubling overall capacity, KDM also gained the ability to offer its customers new point-of-purchase and event products. “Basically, they do vehicle wraps, which we do, too,” says KDM president Bob Kissel. “They have another EFI Vutek, which we added to ours. But they also have a dye-sub printer and an Oce LightJet photo printer, which complement what we currently offer. We both sell signage, but now we can offer photographic pieces and continuous-tone backlit pieces.”

Advanced Digital will continue to operate out of its Columbus location, and all of its employees were retained. KDM plans to place a member of its existing staff at the Columbus site to work with the Advanced Digital personnel “to instill our culture and our expectations, values, and vision,” says Kissel.

The acquisition was a long time developing. “They were kind of a competitor, but very small,” recounts Kissel. “I asked them probably two or three years ago if they were interested in selling. They weren’t at the time, but they came back to me during the summer to see if I was still interested. That’s how it started, and it happened pretty quickly. It wasn’t a large purchase, and it was something like our fifth acquisition in the past six years.”

So would he do it again today? “Yeah, I think I would,” he says. “It’s an opportunity for us to continue to grow, and an opportunity for us to pick up a customer base and some quality people. It gives us the opportunity to increase our capacity and offer new products to our current customers. And, of course, to acquire new clientele.”

Square One Signs: Becoming a major player
Square One Signs ( was established in 2006 as a manufacturer of architectural signs and structures. Its primary customers are commercial properties, such as high-rise buildings. In the fall of 2008, the Newnan, Georgia-based Square One acquired Eagle Signs, a five-year-old digital printing company located in Tyrone, Georgia. The combined company will have eight employees, and operations will be consolidated at Square One’s site in Newnan, which is larger and more convenient to Interstate 85 for shipping and receiving.

“I would say Eagle was both a complement and a competitor,” says Square One president Brian Coursey. “We would bid on the same jobs in the area, but looking at the strengths of both companies, our primary core businesses were different customers. We’re more into the manufacturing: We have a Gerber Sabre 408 router and a hotwire cutter, and we do a lot of foam-based monuments and that kind of thing. Eagle was involved more in wide-format printing-trade show graphics, banners, vehicle graphics, vehicle wraps, that kind of thing. They had a Mimaki printer, so they were in the solvent market as well. So we were kind of in two different areas, but they had a few strong customers we were interested in-some of the larger builders that had survived the real-estate problems.”

The acquisition process took about six months to complete, starting in early summer of 2008. “We were using Eagle to do some of our digital printing,” recounts Coursey, “and had built a bond with the owner, Rich Eagleson, based on that. In the conversations we had, it came out that Rich’s strengths were going out and making the sales and retaining his customers, but he was frustrated with the operations side-trying to manage and run the business. I made the pitch to him: ‘Your strength is in sales, so how about we acquire your company and work out compensation for you as a sales and marketing person?’ So we started bouncing some ideas around to see what kind of package we could come up with. We wanted to make it fair so it was win-win. He actually makes more money now with less headaches and stress.”

Coursey says that Square One has seen enough benefit from the acquisition already that he would not hesitate to do it again. The merged companies have seen an overall increase in revenue: “By combining the two companies,” Coursey says, “I would say our target for the first year is in the million-dollar range. In another two to four years down the road, we want to be a major player in the market.”

Jake Widman is a freelance writer based in San Francisco and a longtime contributor to The Big Picture magazine.



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