Industry Roundtable, Day 2: Which mergers and acquisitions will have the biggest effect on the marketplace?
Industry experts analyze 2012 and project where the market will be in 2013.
The Big Picture has assembled four of the industry’s most informed analysts and consultants and asked them to help you “divine” the marketplace: Where does it stand now, and where will it be in 2013? And, importantly, what courses of action do you need to take to help ensure your company’s success?
For this year’s edition of our annual Industry Roundtable, our participants include: Marco Boer, VP, I.T. Strategies; Tim Greene, director, wide format consulting service, InfoTrends; Dan Marx, vice president, markets & technologies, SGIA; and Peter Mayhew, director, LightWords Ltd.
BPIC: Our industry has had some interesting acquisitions and mergers in the past 12 months, as well as other corporate moves: Danaher (which also owns Esko) acquired X-Rite; Grimco added Proveer’s US operations; Diatec acquired Star Coating; EFI acquired Cretaprint; Bradner acquired Converd; Grapo Technologies was acquired and became SigmaJet; Heytex established a US subsidiary; MTL Print opened a US office. Which of these are the most interesting to you, and which will have the biggest effect on the marketplace?
Peter Mayhew, LightWords Imaging: Over the long term, Danaher’s acquisition of X-Rite is the most interesting. With X-Rite came Pantone – an industry standard and brand that’s portable to new technologies and applications beyond imaging, and a great value-add for Danaher. Diatec’s acquisition of Star Coating didn’t make as much noise on this side of the pond as may have been expected, but that’s the Diatec way. Star Coating is an interesting company with good technology and capability; Diatec is good at spotting niche opportunities. We’re expecting some interesting new products to come (and go). The changes at Grapo Technologies leading to Sigmajet were, in our view, inevitable – Eastern Europe is arguably underserved by wide-format companies with a localized empathy; Sigmajet has all these attributes and is now structured to exploit these opportunities.
Tim Greene, InfoTrends: Grimco adding Proveer is very interesting because Grimco was already a very large and important distributor in this market – but the expanded presence of Proveer makes them one of the few distributors that can really cover the entire country. That should give the company more influence with suppliers and in turn may give individual shops better pricing. EFI’s acquisition of CretaPrint is also very compelling because many of the manufacturers in the wide-format market are seeking ways to get into more industrial segments.
Marco Boer, I.T. Strategies: The challenge is that there are few enticing candidates that provide “scale,” meaning most interesting acquisition candidates – ones with fast growth – tend to be companies with revenues less than $50 million in revenue. Then the question becomes: Who can acquire the most companies and has the strategic vision to create something that’s bigger as a whole than the individual parts?
Dan Marx, SGIA: I think one of the most interesting things to be considered here is that in an increasingly mature market segment, market share can be more easily purchased than nurtured. If the price is right, the customer list is robust, and the product line brings value, then these purchases are well worth it. Many of these mergers we’re seeing are about expanding presence in the broader wide-format market.
This is Day 2 of our Industry Roundtable Q&A; for Day 1’s Q&A, go here.