M&A jump is evidence of recovery
Monday, June 30, 2014
Over the past few weeks there seems to have been an unprecedented spike in the amount of print M&A activity taking place and, believe it not, I’m not just talking about distressed sales or worse, the dreaded phoenixes.
Whether this is further evidence of confidence returning to the sector, or perhaps just a pressure valve type release of a backlog of deals that have been on the cards for a while is unclear, but most likely it’s a combination of both.
Distressed deals are still happening of course – as evidenced by the current situation at Global MP, which, at the time of writing, may or may not be poised for a pre-pack administration sale – largely because the industry is still going though a period of structural change.
But the fact that the print sector seems to be mirroring the broader trend of M&A activity being at it’s highest level since before the financial crisis has got to be a positive sign that the prolonged period of pain that has presumably stifled a fair few deals in recent years is perhaps coming to an end.
And when it comes to M&A activity, especially MBO-based deals, timing is critical.
There’s no doubt that buying a business can be risky under any circumstances, so the fact that an increasing number of companies and individuals are willing to take the gamble has to be a sign that confidence is on the up.
Of course, in an ideal world every deal would be a solvent sale, but sadly we don’t live in an ideal world – but a world without phoenix companies would be start.