Manufacturing

Diversified Printer

A diversified printing company sold products and services to three very different types of customers. They were a commercial printer; an adhesive manufacturer selling to other printers around the world; they also produced their own sticky notes product that was sold to the marketing and advertising sector.

Press operator at the control console of a large offset printing press
3 Business Divisions Sold
3 Strategic Acquirers
3 Transactions Completed

The situation

A diversified printing company sold products and services to three very different types of customers. They were a commercial printer; an adhesive manufacturer selling to other printers around the world; they also produced their own sticky notes product that was sold to the marketing and advertising sector. The Challenge was to determine how to maximize the value of the business when a strategic buyer would only be interested in one of these three business segments. It was clear that some of the business segments had higher gross margins and net margins than the others, but the financial information, costs, administrative overhead, etc. were all consolidated under a single entity. After completing an in-depth valuation range analysis, it was determined that the three individual business segments would be more valuable independently than the business as a whole.

What we did

We needed to gain clarity around the cost of operating each of the business segments separately – instead of the blurry combined financial information – so that we could represent to a buyer the true direct costs of operating each of the business segments independently. Next Point developed three different lists of industry-specific strategic buyers. We developed one book with four sections, an overall description of the company and a part for each business segment, each including extracted financial information specific to the performance of that division. The sequence and timing of each sale, which division was to be sold first, second, and third was necessary because the administrative functions and overhead were going to be divided up, and there could be costs accrued if the sales were not coordinated.

The outcome

All three divisions were sold separately to three different buyers, and the sum of the parts yielded a larger total sum for our client.

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