Labelexpo Americas 2022 conference speaker Bob Cronin, managing partner, The Open Approach, and regular L&L contributor, is set to give a presentation on the topic “Mergers & Acquisitions: Staying Competitive.” This sets the scene for the panel discussion he’s chairing immediately afterwards on the changing industry landscape. Here, he tells us more.
Labelexpo (LEX): Can you give us a brief overview of what you will be presenting on in your session? What do you hope attendees will gain?
Bob Cronin (BC): M&A activity is one of the best barometers of an industry’s trajectory, competitive forces, opportunities and vitality. Every company (at minimum, its leadership and sales teams) needs to understand current M&A dynamics so they can effectively adjust their strategic plan and determine how to pursue their optimal customers and markets. The drivers in the labels and packaging industry have changed. It’s important to understand why investors are putting money into the industry and where specifically they feel is the best value. It’s also important to see what they are building and what that means to your entity and the business at large. My session titled, Mergers & Acquisitions: Staying Competitive will provide a general overview of today’s dynamics and M&A activity and then discuss specific issues that privately held businesses and private equity-owned enterprises are facing today.
LEX: There’s been a lot of industry consolidation in the US in recent years. Why do you think labels and packaging is so attractive to investors and how do you think M&A has been shaping the industry landscape over the last five years? Where does it go from here as we emerge from the pandemic?
BC: Great questions, and these are exactly what we’ll be covering in our sessions. Investors find our space attractive for many reasons, such as its low CAPEX, higher-than-average profitability, and ability to sell in just about every market space with innovative products and services. With the number of private equity investors now involved, there’s a real opportunity to see some formidable new players in the next few years if these deals are orchestrated well. As we emerge from the pandemic, more companies may be open to a sell deal, although lending for these deals may be tampered by inflation. There will still be a steady stream of deals but watch for terms/exit plans to change a bit.
LEX: What advice would you give to smaller converters wishing to remain independent and stay competitive in the near future?
BC: Despite the changing competitive landscape, independent entrepreneurs can thrive. They can leverage many of the same factors their large counterparts can. While it’s important to understand the changing competition, it’s imperative to stay focused on the customer. Your customer will be integral in forging new pathways and innovations. Listen and respond. You’ll also want to keep your technical systems and logistics relationships strong so that you can drive business online and penetrate new markets and geographies as opportunities arise.
LEX: What advice would you give to the larger converting groups when navigating M&A activity?
BC: Large converters need to understand future directions and customer needs and how those impact the foundation of their operations. Successful M&A is not just the result of a good thesis. Your model needs to be dynamic and adaptable to the markets you’re looking to support. A tenured M&A advisor can make a significant difference in shaping your transaction, whether you’re the buyer or seller.
LEX: What are you most looking forward to at the upcoming Labelexpo Americas 2022?
BC: Labelexpo Americas is the ultimate gathering of our industry’s frontrunners in equipment, material, converting, and supplies, as well as research and reporting (i.e., Labels & Labeling magazine). I’m thrilled to see this pinnacle event return to live format for the first time in years. That is an opportunity for all participants to learn about and adjust to the trajectory of the label industry. We’re facing major issues and challenges we haven’t seen before. Labelexpo is a window of information to better prepare for the future. I’m very proud to be part of it.
“Mergers and acquisitions: staying competitive” and “The changing industry landscape” will take place at Labelexpo Americas 2022 in Chicago, on Wednesday 14 September, between 10-11 am, and 11.05-12.05 respectively.
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