Analyst identifies UK converters ripe for acquisition

Industry analyst Plimsoll’s latest report looks into the acquisition attractiveness of the UK’s largest 413 label companies.

The study has identified 50 firms as ‘classic’ acquisitions – underperforming businesses that predators would usually look for.

However, the research company suggests that buyers should be looking to broaden their horizons away from these ‘classic’ acquisitions and should instead take a look at the 23 UK companies identified as ‘high value’ acquisitions.

David Pattison, chief analyst, said: ‘There are plenty of companies that need capital and would welcome investment. Distress sales have dominated the market in recent years as strong companies have looked to take over weaker companies and exploit ailing businesses.

‘But it is now time for a change in strategy. There are 23 firms in the label industry that buyers should be looking at.

‘These companies are privately owned, have increased in sales over the previous year, are debt free and are showing excellent profits.’

And it is these qualities, Pattison argues, that make these businesses attractive acquisitions. He added: ‘Taking over a weak company takes time, is diverting and is a high risk. But these high value acquisitions would immediately add value to your bottom line as well as give you instant power in the market.

‘Indeed, buying one of these companies would give you quick access into a fast-growing market and would instantly give you power – essentially forcing many of your already-weakened competitors out of the game.

‘Of course some of these high value acquisitions would command a high price premium, but this new analysis tells you why some companies are worth more than others and enables you to seek out growth.

‘Most successful businesses work with Plimsoll. For over 25 years we have worked with many of the leaders in this sector and recognize the challenges. A few minutes with a Plimsoll report can change perceptions and open minds to much greater profitability.’

The new Plimsoll report – Acquisitions – provides an in-depth market and industry analysis of the 413 leading companies in the UK label industry. For more information contact Chris Glancey at c.glancey@plimsoll.co.uk.

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