Buying a small printing company: analysing machinery and order book
Introduction
A printing company differs from other types of acquisitions due to its high capital intensity. Machinery often represents 40 to 60% of the company's value. Their age, condition and technology directly determine future profitability.
The order book constitutes the second pillar of the analysis. A printing company may have modern equipment but quickly lose value if its historical clients migrate to digital or change suppliers. Turnover stability depends on the recurrence of orders and the strength of commercial relationships.
In Switzerland, the printing sector is experiencing gradual consolidation. Small family-owned businesses are seeking buyers capable of investing in modernisation whilst preserving existing contracts. Before committing, two essential questions arise: does the machinery enable competitiveness against rivals, and does the client portfolio offer a sufficient base to make the investment profitable?
This guide details the technical points to verify in order to correctly evaluate a printing company and limit risks during the acquisition.
📌 Summary (TL;DR)
Taking over a printing company requires dual analysis: technical on machinery (age, maintenance, replacement costs) and commercial on the order book (recurrence, diversification, contractual strength). Machinery represents 40 to 60% of the value and determines future competitiveness. The client portfolio determines turnover stability and the ability to make the investment profitable.
📚 Table of contents
Printing machinery: the technical heart of the acquisition
The machinery fleet represents 60 to 70% of the asset value of a printing company. The condition of equipment directly determines the viability of your acquisition project.
Obsolete or poorly maintained machinery can transform an opportunity into a financial black hole. Before committing, you must precisely assess the production potential and hidden costs.
This technical analysis determines your purchase decision and your ability to generate turnover from the acquisition onwards.
Identifying the type of machinery and their market positioning
Each printing technology corresponds to a specific market segment. Offset suits large standardised volumes. Digital enables customisation and small runs. Large format targets signage and point-of-sale advertising.
Verify that the printing company's machinery matches current demand in the Swiss market. High-end offset press equipment only has value if you have access to the contracts that justify its use.
Analyse the consistency between equipment and commercial positioning.
Checking age and technological obsolescence
An offset press has a lifespan of 10 to 15 years. Digital equipment ages faster: 5 to 7 years maximum.
Request the year of manufacture, serial numbers and software update history. In digital printing, technological obsolescence is rapid. An 8-year-old machine may be outdated.
Warning: some manufacturers discontinue technical support after 10 years. Verify the availability of spare parts and after-sales service.
Assessing maintenance condition and service history
Demand complete service records, maintenance contracts, and invoices for major repairs from the past three years.
Engage an independent technician for a thorough audit. They will identify hidden costs: parts to replace, upcoming major overhauls, abnormal wear.
Machinery without documented maintenance history is a major warning sign. Unexpected repairs can cost tens of thousands of francs.
Calculating replacement and operating costs
Estimate the replacement cost when new versus second-hand for each piece of equipment. A new offset press costs between 200,000 and 800,000 CHF.
Calculate annual operating costs: consumables (inks, plates, paper), energy, preventive maintenance. These charges represent 15 to 25% of turnover.
Establish the cost per print and profitability per machine. This methodology enables you to identify profitable equipment and those that damage margins.
The order book: analysing turnover stability
Historical financial statements are not sufficient. The order book reveals the real health of the printing company at the time of acquisition.
High past turnover guarantees nothing if key clients have left or if contracts are not renewed.
Analyse the composition of the client portfolio, order recurrence, and strength of commercial commitments. This is your best indicator of future revenues.
Distinguishing recurring and one-off orders
A loyal client with an annual contract is worth far more than a one-off project. Aim for 60 to 70% recurring revenues to guarantee stability.
Identify clients with regular orders (newsletters, annual reports, packaging) versus one-shot projects (events, campaigns). Recurrence reduces commercial risk.
Beware of dependency: if two clients represent more than 50% of turnover, your business is fragile.
Analysing the quality and strength of client contracts
Verify the duration of contracts, termination clauses, and renewal conditions. A contract terminable without notice has no value.
Assess transferability after acquisition. Some contracts are tied to the seller personally (intuitu personae) and do not survive the change of ownership.
Request the last three renewals of each major contract. A client who has renewed regularly for 5 years is a solid asset.
Assessing sectoral and geographical diversification
A diversified client base protects against sectoral crises. Ideally, mix public sector, private SMEs, associations, and large companies.
The pandemic demonstrated the risks of concentration: printing companies dependent on events lost 60 to 80% of their activity in 2020.
Analyse the catchment area and local competition. A printing company with clients within a 50 km radius is less vulnerable than one dependent on a single canton.
Verifying production capacity against commitments
Cross-reference the order book with the actual capacity of the machinery. Excessive subcontracting indicates under-capacity that erodes margins.
Conversely, inactive equipment reveals costly over-capacity. Calculate the utilisation rate: 70 to 85% is optimal for a profitable printing company.
Identify bottlenecks (finishing, guillotining) that limit production. These weak points require rapid investment after acquisition.
Specific vigilance points for Swiss printing companies
The Swiss market imposes specific constraints: strict environmental standards on solvents and waste, high salary costs (60 to 70,000 CHF per qualified employee), and increased competition from online printing companies.
The digital transition is reducing traditional printing volumes. Verify that the printing company has adapted its offering (web-to-print services, customisation).
Engage experts for technical and financial due diligence. Consult the Leez partner network (fiduciaries, technical experts) and explore the available companies to compare opportunities.
Taking over a small printing company rests on two fundamental pillars: the condition of the machinery fleet and the strength of the order book. Equipment determines your production capacity and future investments, whilst client contracts guarantee the stability of your revenues. Rigorous analysis of technological obsolescence, maintenance costs and client diversification enables you to assess the real potential of the business.
In the Swiss context, where environmental standards and quality are demanding, these verifications take on particular importance. Every technical and commercial element must be documented and validated, ideally with the support of sector experts who know the specificities of the printing market.
Are you considering acquiring a printing company? Discover the printing companies available on Leez and access all the information necessary to make an informed decision. Our platform puts you in direct contact with sellers and gives you access to a network of experts to support you in your acquisition project.
