Valuing Printing Businesses
THEODORE P. BURBANK
Casual observers may think of printers as a uniform group, but in practice, the industry is unique in its diversity. There are many kinds of printers; most are relatively small and a few are quite large. Some shops are specialized, but most perform a wide range of services, and a significant segment has been franchised. This industry can be characterized as mature, stable, and diverse, in which most companies are owned or controlled by individuals and are profitable.
The diversity of company types and sizes that comprise this industry preclude there being an industrywide pricing formula that would be meaningful. However, the National Association of Printers and Lithographers (NAPL) has endorsed the Ongoing Concern Method as the valuation method of choice to its membership. This method and other considerations are explored further in this chapter.
Attempting to value a company based upon financial information alone is not unlike a blind person attempting to describe an elephant by touching only one part (assume there is a financial part) of the animal's anatomy. Conclusions derived from this exercise could be credibly defended as accurate based on the information collected. A sighted observer's description would probably differ yet be most accurate given the ability to view the entire subject. If financial statements were