Day 4: Charting Wide-Format Printing’s Course – Acquisitions on the Manufacturer and Supplier Side

14 days of critical information to prepare your business for 2012.

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BPIC: If we were titling a movie that recounted the acquisitions on the manufacturer and supplier side in the past 12 months, it probably wouldn’t be called The Fast and the Furious. Yes, EFI recently acquired Prism and also acquired PrintSteam in early 2011; Flexcon purchased the graphics division of Arlon; Danaher acquired EskoArtwork and Transilwrap acquired Interfilm as the year opened. Otherwise, however, it was pretty quiet on the M&A front wasn’t it? And, just for fun, what would you title 2011 if it were a movie about the market’s M&A?

Tim Greene, InfoTrends: I think it’s true that as far as the supplier side goes there has not been a great deal of activity in the M&A area, but I think this is due to the economic situation – with a lot of uncertainty in the market there are few companies willing and able to fund the acquisition and take on assets. Some of the ones that have come together – like the 3M acquisition of OriginalWraps – are cool because they seem to be advancing the idea of moving closer to customers to advance the brand and lock up business. Or, in the case of the EFI acquisitions, they’re entering new markets without taking on huge physical assets. What would I title 2011 if it were a movie? I’m torn because if I can work the title Hot Tub Time Machine into this conversation then I win a bet – but to characterize the year’s activity, maybe Bang the Drum Slowly is more accurate.

Dan Marx, SGIA: The mergers and acquisitions we’ve seen among industry equipment and materials manufacturers is expected as a number of companies are working to build their product portfolios and increase their current and long-term competitiveness. While our industry is quite mature, it’s far from static, and there is quite a bit of jockeying – particularly among major players – to stay on top. If I were to provide a movie title, I might go for, The Sweet Smell of Success.

Peter Mayhew, Lyra: Each of these acquisitions moves makes sense for the purchasers. We’ll be watching closely to see how EFI and Danaher integrate their new assets for the benefit of their businesses.

Marco Boer, I.T. Strategies: Mergers and acquisitions are typically done to gain scale. There are few companies left to acquire in the wide-format business that can add sizeable scale to anyone’s business, so naturally the volume of acquisitions and mergers has gone down. Second, mergers and acquisitions often look great on paper, and companies are getting better at identifying through due diligence where the skeletons are in the closets, but in the end the challenges arise during integration time. The cost savings expected are often overshadowed by new investment needed, getting the combined company culture on a single track, etc. What we’ve seen with the 2010/2011 acquisitions in the wide-format space is more indicative of expected long-term strategic benefits, not immediate scale/cost savings benefits. They are effectively relatively small financial bets on potentially major strategic benefit in the future.

Art Wynne, BERTL: Mergers and acquisitions are always interesting and it’s surprising to me that we have not seen more of them. We expect consolidation and re-alignment of businesses to continue but at a higher uptick then what we have seen to date.

The Big Picture has assembled five of the marketplace’s most informed analysts and consultants and asked them to help you evaluate the wide-format industry. Each day over the next two weeks, we’ll post a new, critical question from The Big Picture with invaluable answers from our panel – all designed to help you ensure that your company charts its best course for a prosperous year ahead.
Our 2011 panel participants include: Marco Boer, consulting partner, I.T. Strategies (; Tim Greene, director, visual communication technologies consulting service, InfoTrends (; Dan Marx, vice president, markets & technologies, SGIA (; Peter Mayhew, director, Lyra Research Europe (; and Art Wynne, president, Business Equipment Research and Test Laboratories (BERTL,

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