1. Five Tips for Success in the Consolidating Plastics Industry
Blake Corners
Merger & Acquisition Advisor

2. What does this number represent?
2,120
Answers
a) The number of M&A transactions worldwide
b) The number of global plastics M&A transactions
c) The number of business here at MD&M Minneapolis
d) The number of transactions the Douglas Group has closed

3. Global Plastics Industry M&A Transactions
Source: PlasticsNews.com

4. Transaction Motives Primary Motives of M&A Transactions
Fill a Strategic Portfolio Gap
New Market Penetration

5. Today’s M&A Landscape Highly Active & Competitive Buyers
Record Levels of “Dry Powder” & Favorable Interest Rates
Growing & Fragmented Market Niches
The Changing Manufacturing Environment
Average Company Life Expectancy

6. Tip #1 Don’t subscribe to the “Knock, Knock plan.”
Know who is knocking & why.
Ask key questions & leverage it to gain competitive insights.

7. Tip #2 Avoid the Rip Van Winkle Effect.
Be the industry pioneer/disruptor who seizes opportunities.
There is security in a well executed transaction.

8. Tip #3 Understand Your Value & Competitive Edge.
Price is what you pay, value is what you get.
Know & understand your niche.
Timing can make all the difference.

9. Tip #4 Embrace Competition. Competition drives innovation & growth.
The reality of strengths & weaknesses
Competitive market positioning drives business

10. Tip #5 Be True to Your Values. Human capital is the most valued asset.
Creates significant opportunities for employees
Alignment of values, culture & strategic objectives pays off.

11. Tips of Success Summary
Don’t Subscribe to the “Knock, Knock Plan”
Avoid the Rip Van Winkle Effect
Understand Your Value & Competitive Edge
Embrace Competition
Be True to Your Values

12. Current Market Multiples Range: ~5Xs – ~8Xs EBITDA
Value Differentors
Rule of Thumb
Middle market companies typically can expect valuations based on a multiple of pre-tax earnings (EBITDA – Earnings Before Interest, Taxes, Depreciation & Amortization)
Current Market Multiples Range: ~5Xs – ~8Xs EBITDA
Value Drivers
Sales Volume
Strong Gross Margins
Steady Growth History
Strong 2nd Tier Management
Patented Products or Processes
Equity 25% of sales
Value Detractions
Significant Customer dependency
Recent Margin Erosion
Lack of Niche Focus
Low Profitability (% of sales)
Capital Expenditure Requirements

13. How will you remain relevant?
Blake Corners
Merger & Acquisition Advisor
Douglas Group