“Boot Camp” Valuation Workshop for Graphic Company Owners

Mark Hahn

If you are seeking some straightforward guidance to determine the value of your printing, wide-format, or other graphic communication services business, then my afternoon session (Thursday, October 24^th at 2:00 pm in Room C148) at PRINTING United is for you. I’ll be explaining some of the basic approaches in valuations, and how these apply to graphic companies — whether you are in acquisition mode, beginning to think about exiting your ownership position, or simply benchmarking your company to determine the value of the equity you have built. This will be a practical workshop, so come prepared to ask questions.

We hear a lot about valuing a company using the “multiple of adjusted EBITDA” and while this method has gained widespread acceptance within the M&A practice in our industry, there remain many open questions about exactly what are those “adjustments” and especially how does a company owner determine the multiple to apply? And, importantly, what’s the difference between enterprise value and my net shareholder proceeds?

We’ll start off by running a drill on a sample company to illustrate the basic information and simple calculations that form the foundation for the valuation process. Following will be a critical (and sometimes amusing) look at typical perks and other expense items that many owners feel should be “added-back” to their company earnings to establish the normalized profit upon which the value should be based.

GAA’s 14 Keys that Drive Value will be used to determine the rank of our recruits; what is the basis for the range of multiples that we apply to the adjusted EBITDA? Hint: how does your company measure up in three broad categories: financial metrics, customers served, and management.

What happens when a company does not have any EBITDA? (If there are no earnings, there is no “E” and any number times zero is zero). Is there still value and how do we determine that value? We’ll explore how buyers are determining company values in tuck-in transactions, and answer the question: is there any value left when a company is distressed and losing money?

We’ll wrap up the session with some insight into earnout provisions, the impact of working capital adjustments, transaction structures, and the current state of the M&A market in our industry. Audience participation will be encouraged throughout the presentation.