Selling a Commercial Printing or Plastics Molding Company

Machine time is the inventory

A shop sells hours on its equipment. For a printer that means offset presses, digital presses, wide-format printers, folders, cutters and the bindery line. For a molder it means injection presses of various sizes, auxiliary equipment like dryers, chillers and robots, and sometimes extrusion or blow molding lines. A buyer asks how many shifts each machine runs, what share of the time is spent producing and what share is changing over from one job to the next, and which machines sit idle.

Utilization shows what a buyer can grow into. A shop running its main presses on two shifts has little room, and the buyer will ask about the cost of another machine. A shop with idle capacity gives the buyer a way to add revenue without new equipment, provided there are customers to fill it. Age and condition are checked with an equipment appraisal or an inspection, and maintenance logs help. A press that has been rebuilt is described differently from one that was just kept running.

Repeat work and how it is priced

The best customers send the same job again and again. A printer with a book of repeat orders, packaging runs or catalogs that reprint on a schedule is worth more than one that lives on one-off quotes. A molder with parts in production for several years, on blanket purchase orders with release schedules, looks more stable than a prototype shop.

Buyers read the quoting process too. Do estimators price from a documented method and check results against the job, or does the owner price by feel? They compare quoted cost with job cost on a sample of finished jobs, and they look for customers that have been quietly unprofitable for years. Scrap rates, rework, on-time delivery and customer returns are tracked in good shops, and a buyer will ask to see them. A shop that cannot say how much material it throws away each month is guessing at its margin, and a buyer will notice the guess. Our post on customer concentration is useful if a single account supplies a large part of your work.

Molders serving automotive, medical or food customers usually hold quality certifications and have been through customer audits. A buyer will want those certifications to stay in place, and will ask what would be needed to keep them under new ownership.

Tooling, files and who owns what

Molds are expensive and who owns them is often unclear. Some belong to the customer and sit in the molder's building. Some belong to the molder and were paid for in part by the customer. Some were paid for through a piece-price amortization that nobody wrote down. A buyer will ask for a list of every mold, who holds title, where it is, its condition and how many shots remain in it. Customers can take their tooling and move the work, so the written terms matter.

Printers face the same question with plates, dies, finished artwork and customer files. Digital files, variable data, print-ready art and any proprietary customer information should be listed, along with the customer's rights to it.

Software has its place as well, and it gets less attention from sellers than it should. Many shops run an estimating and production system that holds job history and customer pricing, and a buyer will want to know the license transfers and the data exports.

Materials, permits and the building

Paper, ink, resin and additives are the largest cost after labor, and prices move. A buyer wants to know whether customer agreements let the shop pass those increases along, and how fast. Shops with pass-through clauses carry less risk than those who absorb swings and hope. Inventory of paper stock or resin is counted and valued at closing, and old or unusable stock is a point of argument.

Both trades come with environmental obligations. Printing uses inks, solvents, cleaning chemicals and plates that create waste, and plastics operations deal with resins, colorants, regrind, hydraulic oil and cooling water. Air, wastewater and hazardous waste permits may be needed, and a buyer will ask for the permit file, inspection reports and waste hauler records. Some permits move with the business and some must be reissued, and rules vary by state, so your attorney confirms what applies. Buyers or their lenders often order an environmental review of the site, and any past spill or storage problem comes up at that stage.

The building matters. Heavy presses and molding machines need strong floors, high ceilings, three-phase power, compressed air and often chilled water. Moving a plant is expensive, so a buyer cares a great deal about the lease, its remaining term and the landlord's consent. Our post on the lease as part of the deal describes how that conversation goes. If you own the building, see selling with real estate attached.

The crew

Press operators, setup technicians and mold techs are skilled, and many are near retirement. Shops struggle to find replacements, and a buyer who sees a crew with long tenure and a few younger people learning the machines will pay attention to that. Buyers ask for a roster with tenure, pay, certifications and the machines each person can run. They ask who sets up the complicated jobs, who troubleshoots a mold that is flashing, who runs color match. If the answer is the owner, the price will reflect it. Customer service staff and estimators matter too, since they keep the relationships that make repeat work repeat.

Telling the crew too early about a sale causes trouble, and telling them too late does as well. See our post on when to tell employees for how we plan it.

What sinks a sale, and getting ready

Sales in this field fall apart when a main customer reshores its tooling, when a press fails during diligence, when an environmental question appears late, when the lease cannot be extended, or when the buyer finds that the owner did all the selling. Financial records that do not tie to job costing slow things down. Inventory that was valued at cost for years but could not be sold today will be written down.

Preparation looks the same in both trades. Reprice unprofitable customers. List every mold, plate and file with its owner. Keep maintenance logs for every machine. Cross-train the crew. Get your permits in a folder. Reconcile job costing to the books.

To see how a buyer would approach your shop, read our page on selling a printing or plastics company. Business Advisors of America builds the valuation and the buyer package from your own numbers, and a call with us is the place to begin.

This article shares our opinion and general information. It is not legal or tax advice. Always speak with a licensed attorney for legal advice, and a qualified tax professional for tax questions, before you act.