PPB November 2018

Mergers & Acquisitions | FEATURE focus on the staff and culture as much as on the bottom line. “If you’re buying a business that is driven by a strong sales team, it’s going to be really important that those salespeople stick around. They ultimately have the relationships,” Cohen says. When planning to sell a company, it’s important to talk to the staff about the new culture and their role in the business. A successful transition ensures that both organizations can continue doing what they do best, especially in terms of personnel. “You can buy a business but find out what you’re buying is fleeting if those people decide to leave or are unhappy,” Cohen adds. What Acquisitions Mean For The Future When it comes to the industry’s future, there are as many opinions as there are suppliers and distributors. There has been fear that consolidation is a threat to the industry, creating a handful of giant businesses that could stamp out smaller competition. While more change is inevitable, the consensus is that the promotional products world is too diverse—and too creative—to ever become monolithic like some of today’s modern tech giants. Both Simon and Koosed expect the biggest fallout to be among mid-sized businesses earning between $10 and $20 million. Companies in this range aren’t pursuing the same clients as mom-and- pop outfits, but they also may not have the resources to compete with the $100 million-plus titans. While that scenario may be scary to some, there is a silver lining: companies in this range are the most attractive targets for acquisition, giving them great value. Even with increased consolidation, the industry itself is inherently resistant to any onemajor player. The fragmentation of the market, from suppliers and distributors to clients, can only bemet with a large and diverse system. As Cohen puts it, “There are 20,000 distributors out there. It’s not going to become an industry of 100 companies with no room for small business.” Of course, the outlook for the industry is great when you’re the one buying all the competition, but it goes both ways. As someone who recently sold his company, Mounger couldn’t be more optimistic about the future. “Better, stronger competition will be the end result,” he says. “There will always be room for what makes this industry attractive, and that is the entrepreneurial spirit that attracted so many of us to the industry to begin with.” Kyle A. Richardson is a writer and editor living in Philadelphia and the former editor- in-chief of PromoMarketing magazine. Reach himat www.karichardson.com. | NOVEMBER 2018 | 67