It seems like every time I open a copier industry email or publication, I’m reading about another string of acquisitions. And as you know, Marco is certainly an active participant. In recent years, the copier industry has seen a steady increase in consolidation.
So, is it a good time to sell?
Here’s how we see it:
- The economy is strong.
When the economy is strong, business is good. You could make a case that we are at the peak of what good looks like in business conditions. Now is probably a good time to look at your long-term business succession plan. It’s easier to evaluate when things are going well rather than when things are in decline, and economic conditions dictate your path.
- The copier industry is in decline.
The copier industry is mature, which makes it difficult for dealers to grow their business without expanding their service offerings. If you’re not confident in your diversification strategy, then it might be time to think about alternative ways to transition your business.
- There are more buyers.
Copier dealers have become attractive to more buyers. This is giving dealers more options to sell their business and secure their future. I think it would be a good idea to align your company with an IT strategy that can provide opportunities for your employees and build resiliency in your business model. Finding the right buyer is key to carrying on the legacy you want for your business.
- Valuations are strong.
Multiples are the highest we’ve seen since Marco started acquiring dealers in 2005. Valuations will eventually level off. None of us can say for certain when that might be, but “timing is everything.” And, the timing looks pretty good right now.
- Securing the future of your dealership will require an investment.
I think it’s fair to say the industry has chosen Managed IT Services as a replacement for declining recurring copier revenue. The build-out to execute on Managed IT takes a minimum investment of about $500,000. Buying it certainly is an option, but make sure you get what you are paying for. Outsourcing is another option; however, it doesn’t drive the same enterprise value.
Most business owners have thought about selling at some point. It’s a natural part of the lifecycle of a business and succession planning. It can feel far off and even intangible, but given the factors in today’s market, it’s a pretty good time to start thinking about it. Often times the results are far better than the owners imagined.
Selling a business can be an emotional ride. I know. I’ve been there myself and worked alongside dozens of other copier dealers over the years as they transitioned their business to new ownership.
I’d be happy to share my experience, talk about the process of selling a business and discuss if the timing is right for you.