Rich ready to rescue the industry’s needy says analyst
One in four companies in the UK print industry could change ownership as a result of the current economic climate, claims a new study by financial analyst Plimsoll. It shows a number of cash rich competitors means the market could be set for a prolonged period of consolidation.
David Pattison, author of the new Plimsoll Industry Analysis ‘Printers’, said: “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers market out there for cash rich companies”
Pattison continued: “In the Plimsoll Industry Analysis we have identified 164 companies that have a sizeable cash reserve sat on their balance sheets that, due to record low interest rates, is generating nothing. One company has a £47 million cash pot. These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them. They must be like kids in a sweet shop at the moment – all those distressed competitors available at a fraction of their true value.
“The UK print market is still widely regarded as one of the UK’s most fragmented sectors. The report analysed 754 companies with a turnover of over £1m per annum and identified 228 that are primed to be taken over. Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the next months”.