Printer Sales & Service Company

October 18, 2021

by a searcher from Baker College of Muskegon in Kalamazoo, MI, USA

Last week I came across a printer sales and service company for sale. They work with government agencies, schools, doctor offices, hospitals, etc mostly.

I have reviewed the CBR and the company looks solid. I can see the ability to grow it through adding additional services.

I have two primary questions:

Are there any immediate red flags for the industry? Despite the move to digital, printing doesn't seem to be going away.
We are looking for a minority shareholder to come in to add additional cash liquidity if we move forward. We have 10% downpayment ready and plan to SBA finance the remaining. We could need an additional###-###-#### %. How would you structure a deal with a shareholder?

Reply by a searcher
from INSEAD in Praha, Česko

Hi Zachary - I signed LOI with a similar company in Central Europe. The main risk my investors see is the decline of print accelerated by COVID-19. The decline is there indeed but as you mentioned we are becoming paper-lite, not paperless. More importantly, my target (and many others) also lead the adoption of digitalization and document management systems and provide software solutions + full IT outsourcing... market that is growing 10 and more % annually. For SMEs it usually doesn't make sense to do this in-house and once you have a contract there is an automatic renewal. The switching costs are high as far as you don't make your customer really angry. These companies are also in a great position to shift into full HAAS, a booming opportunity these days.

Reply by a searcher
from Ivey Business School at Western University in Toronto, ON, Canada

I‌ would recommend you ^redacted‌ review the annual reports / investor day slides for Ricoh, Xerox and Canon. All of them have commented on structural changes anticipated going forward regarding print page volumes.

+5 more replies.

Join the discussion