An interview on selling a company: “I don’t believe in ‘window dressing'”


Do you know how much your business is worth? Or what you should look out for when it comes to buying or selling a business? No? Then you should definitely tune into the latest episode of the Beyond Print podcast! Because that’s exactly what Bernd Zipper discusses with Jens Freyler, Managing Director of the Hamburg-based consultancy, Knox, and initiator of, the new business exchange for the printing industry.

Bernd Zipper: Company succession and the sale or purchase of a company often do not go as planned. “Turnover equals sales amount”, you can check that off, can’t you?

Jens Freyler: It always depends. The turnover equals the sales total can certainly be the case. There may be more; often there is less. For me, the turnover is not so decisive, but: What does the company earn? What is the market position? Which customers does the company work with? How is one positioned? These are the factors that are decisive in seeing how much you get for the company in the end.

Bernd Zipper: Let’s take a medium-sized printing company. It has sales of eight to ten million, good machinery and a nice site, a well-coordinated team, and so on. One might think that this constitutes a value that represents something to the outside world, and that what’s on the balance sheet corresponds to the company value, wouldn’t you?

Jens Freyler: The company value is always derived from the earnings situation. If you earn good money, then the company is worth a lot. Of course, the machines are of value, but we all know that: If someone wants to buy a used printing press, he will find a used printing press. No one would like to have exactly the same mix of machines second-hand that is in any print shop. Preferably, they just want the jobs. In this respect, the value of the company is derived from the orders, from the employees, from the know-how and from the customers. To produce, you need the machines. Real estate is perhaps something else; it can be a separate value. You have to look at that. But first of all, a company that earns money is well positioned.

Bernd Zipper: However, many people are now in the situation where they are not earning any money and have decided to sell their company. What would be your advice? Close it down?

Jens Freyler: Shutting down is the very worst solution and should always be the very last option. Of course, every company has a value; in the worst case, it is just the machines. But I actually always see a value that goes beyond that. When in doubt, you have to see where it is. How do you present it? And for whom does the company have the greatest value? In case of doubt, you have to address that person. And you have to look at the Corona situation. If we have a company that was still doing quite well in 2019 and now – like many in the industry – has had two difficult years, then in each case you should make a fair assessment of what the situation was like prior to Corona.

Bernd Zipper: Corona is of course a big topic, but I would deliberately exclude that, because I think every investor knows that there is a special situation there that you have to evaluate separately. What would you advise someone who can no longer invest? Look for partnerships? Or actively sell so that the jobs can be preserved?

Jens Freyler: Well, if someone doesn’t know what to do next, one option is to look for a sparring partner to discuss it with. To have a mirror held up to you, to get another opinion and to hear what the situation is like at other companies. Are there aspects in which you are not quite as well positioned as others? Is this something you should actively address? Yes, always 100 percent! If you want to change something, you have to take the initiative. This could be in the direction of cooperation and asking yourself, “Which partner suits me? How do both companies benefit, what helps both? Or you look for a buyer who will take over the company and continue it, perhaps even expand it in the future, and thus, as you said, secure the jobs. But for that, you have to be active.

Bernd Zipper: Some print entrepreneurs are afraid that they will no longer have any say in their own company if they bring in an investor, that they will no longer be their own boss. I always say, “Yes, that’s how it is.” When you work with partners, then of course the partner wants to have a say, then you have to answer to them. What are your impressions, especially when it comes to another company taking over a printing company? What are the consequences for the former owner?

Jens Freyler: There are consequences, of course. They depend on the particular circumstances. If someone invests in a company, then this must be accompanied by a right to have a say. How big that is depends on the size of the stake or shares that the person acquires. It depends on the personal circumstances. As a rule, the entrepreneur who hands over the company or parts of it is held in high esteem because he knows the customers and employees, and in this respect, he remains the one who has a significant influence on further development. But nevertheless, when a competitor – or strategist, as we call it on the M&A side – becomes involved with a printing company, it does so in order to leverage added value. That can mean thinking about which jobs work best on which press? And then it can lead to one or two jobs perhaps being completed at the investor’s plant, but other jobs coming to you instead. So, the orders always run where they are most profitable with the machine, on the respective equipment, or where the capacity utilization allows or requires it. So there will always be changes. And if you are part of a group, then you have to think about the needs and the concerns of the group, which can and should nevertheless be in the interest of the respective company.

Bernd Zipper: You say that there are different investors. You talked about strategists. What else is there?

Jens Freyler: We always look at several groups. There are strategists. Strategists can be direct competitors. They can be customers or suppliers, or they can be lateral entrants, for example a commercial printer who is looking in the direction of packaging printing because he sees a market there where there is perhaps a bit more growth and where a bit more margins are permissible. There are financial investors who are initially completely independent of the industry, but who see an interesting field in certain segments of the printing industry. They can be managers, i.e. entrepreneurs or aspiring entrepreneurs who are in a management position, have perhaps made a bit of money and, together with a bank, a development institute or together with a financial investor, are interested in taking over a company into which they can put entrepreneurial spirit and reinvent it.

Bernd Zipper: If my company is not doing so well, how likely is it that I can get an investor from outside a bank? Are there any possibilities?

Jens Freyler: Basically, there are always opportunities. As the saying goes, there’s a lid for every pot. If a company is not doing well, then of course the negotiation parameters you have are not optimal. But there are investors who consciously seek out difficult situations because they know that they might be able to acquire a good company more cheaply, and because it is perhaps their expertise to restructure and bring order to a company. They say, “we are good at building up sales activities” or something similar. It doesn’t always have to be the case that you can equate a financial investor with a locust. This term became widespread a few years ago. But I think it only applies to one, two, three percent of financial investors. Most of them are enthusiastic about and committed to companies in which they see potential and which they want to develop or expand again together with the entrepreneur.

Bernd Zipper: I can confirm that. In working with you, I’ve already had the opportunity to talk to one or the other. And I have encountered the fewest locusts. What I like very much about the Zipcon/Knox collaboration is that we don’t go around the country with a “megaphone”, but rather that we specifically go into the industry to see who fits together and how. We prefer to seek personal contact rather than announcing “Druckerei Müller is looking for a new owner” with a blimp over the city.

Jens Freyler: When you fly over the city with a blimp, a lot of people see it and, in some cases, even those who have nothing to do with it. For me, confidentiality is important in this process, and we – including you and zipcon, and of course Knox – know the industry very well. We talk to people all the time. We can look a little deeper into companies than perhaps anyone else can. And we have a relatively good feeling about what might be a good fit. That’s the crucial thing. Not to say, there is a print shop here – there are hundreds of print shops in Germany – and I have to approach all of them because they could be buyers. In theory, they could be, but with 90 percent, the probability that they would be the suitable buyer is low. But if you look beforehand, who fits the bill? Who might have made other purchases before? And what might be the trigger for him at this company? Then I try to approach them personally. We do that quite well because our network is broad. If we get to the right addressee and then talk to them – as soon as we have clarified the confidential framework – not just about the company, but about the aspects of the company that are exciting for the respective interested party. This means that I may talk about the same topic differently today than I will tomorrow. It is always important to see where the most added value is. And this applies to all sides, including the entrepreneur who is selling his company.

Bernd Zipper: There are some people who want to get personally involved, take over companies relatively quickly and present that to the outside world accordingly. What is your experience? Is it better to make such a transaction directly, i.e., businesspeople between themselves? Or is it better to do it through an M&A advisor?

Jens Freyler: Part of it can be done by business professionals among themselves. But it has some disadvantages, in my opinion. One disadvantage, or conversely, one advantage, when we are involved as M&A advisors, is that we can initially operate anonymously. We can approach a potential buyer and, to a certain extent, keep the company we’re working for anonymous for the time being. The entrepreneur himself can’t do that. Another aspect is, it eats up a crazy amount of time. In fact, the main task of the entrepreneur is to keep his company operationally on track during such a sales process, which can last nine to twelve months. If the entrepreneur spends too much time on the topic of M&A or the sales process during this phase, it may harm his operational success. Under no circumstances should this happen.

There are many tasks that come up in a sales process and for which it is good to involve someone who has a relatively high level of experience with it. The entrepreneur usually doesn’t have that, because he usually sells his company only once. We do it several times a year and we do it several times a year in the printing industry. In this respect, our wealth of experience is simply much greater. Nevertheless, there can be individual cases where joint ventures become partnerships because so much is done together anyway. Then things go their own way. But even then, at some point you need an M&A advisor or a good lawyer, although by then you may already be two-thirds of the way there.

Bernd Zipper: I believe that there is now a different dynamic in the market than there was a few years ago. Today, it’s almost “in vogue” to merge companies, to build up small groups of companies and to go to market with correspondingly greater clout. How do you see this at the moment? Do you have any experience with smaller groups?

Jens Freyler: Yes, the picture is changing at the moment. You could see before Corona that there were a few “usual suspects”. That is, the large online printers who have grown and who have always been able to buy up companies left and right. Things have quieted down since the Corona era because, of course, workloads in the printing industry in general have declined and there are other issues to deal with. But there are others coming into the market. There are others coming in who, as you say, are forming groups. There is a perception that there is some need for consolidation in the industry. And that is a field that is interesting for investors. To that extent, there is activity there. There are more and more cross-border transactions, as we call them, in which a company looks across national borders. In Germany, we have a good situation in that we are located in the middle of Europe and are a country with a large population. This means that if someone – I’m making something up now – from Benelux is looking in a neighbouring country, the probability that they will look around Germany is relatively high. In this respect, the position for German companies is not so bad. That means you have to be seen and noticed by those in the rest of Europe – or you have to show yourself to them or approach them.

Bernd Zipper: Both of us are already very active in this field as a company. And six months ago, you came up with the idea of founding, i.e., “Exchange” derived from “Stock Exchange Market”. We were hooked and got involved. Maybe you could briefly outline your idea again, why you initiated it?

Jens Freyler: We recognized that there are many change processes and many issues in the print market. And there are smaller companies that are in a more difficult economic position and find it difficult to enter into a professional consulting process. For them in particular, it is important that there is a marketplace. That was one intention. The other intention was that we have seen that it is becoming more and more international. That means you have to create a space where a company from Germany can discover a company from Poland or a company in Spain, in Portugal or in Italy, wherever. And vice versa, in both directions. That’s when we came up with the idea of creating a platform – Print-eXchange. It’s not the first platform of its kind. There are a few, but they are cross-industry. There were a few points that always bothered me. For one thing, some have listed an insane number of potential companies, but my print store gets lost among craft businesses, tea stores and restaurants. And when I, as a potential buyer, see – to exaggerate – thousands of ads, none of which interest me, I quickly lose interest in digging through them. We now have a platform that is completely dedicated to the printing industry. This can involve topics on the fringes. I’ll say presses, publishing, consumables – these are all topics that fit in. But really, every print entrepreneur who goes to print-eXchange should be able to say, I can do something with that.

That’s one issue. The other issue is that we have said we want to help an entrepreneur, for whom a company sale is just a special challenge, to design a high-quality ad that is nevertheless confidential and preserves his anonymity. We make sure that the company is not immediately identifiable, but still presents itself in such a way as to appeal to the right audience.

Bernd Zipper: That means you place an ad on Print-eXchange, which is a company exchange for the printing industry, in order to be represented, and then you can specify whether you are looking for a company or want to sell one.

Jens Freyler: Yes.

Bernd Zipper: And I don’t get a call from you the very next day?

Jens Freyler: Possibly, as we want to help formulate the ad correctly, but after that the entrepreneur is left alone. We see what responses come in, we make sure that a confidentiality agreement is kept and then the entrepreneur receives the expressions of interest by e-mail. It’s up to them to decide who to respond to and how. For this, they can coordinate with us. They can take their time to see who has contacted them and decide whether they consider that person to be a serious interested party, which of course we hope they are. They can ask themselves, “Is this person a good fit for me, do I want to approach them?” Maybe there are two or three with whom they do not have such a good feeling initially and do not react to them at first. That is up to the entrepreneur. Just like in the past with a classic classified ad.

Bernd Zipper: So that means you help out as a platform – but you’re not the ones who do the actual cold calling afterwards to get new M&A customers?

Jens Freyler: No, absolutely not. That is not our interest. The platform says that there are other topics that we can cover. So, Print-eXchange can be the ideal solution for an entrepreneur, but it still doesn’t answer the question of what the company is worth. If the entrepreneur wants supplementary support, for example to find a benchmark so that he even knows whether his idea is fair or good, then these are additional topics that he is of course welcome to discuss with us. But that’s not the core of the platform and it’s not in our interest to upsell there. The platform stands on its own. It will be available in English in a few days in order to address potential interested parties more or less throughout Europe.

Bernd Zipper: Let’s go back to the process: I go to and click on Advertise and place my ad. Correct?

Jens Freyler: Exactly.

Bernd Zipper: It’s like a normal classified ad, or rather a normal advertisement. How much does the trick cost me?

Jens Freyler: The idea behind the fun is that we divide it up into the type of support that the entrepreneur wants. The basic package costs 95 euros. The extension package is a bit more extensive. However, then it is in such a way that personal advisory service is integrated by us, if the entrepreneur wishes that. In addition, there is a success commission if a sale or purchase is concluded via the platform, and only then. In M&A, it is common – and this is how we normally work – to work exclusively with a consultant. That’s not what we want here. We say: Only if something comes about via the platform, then of course it has to charge a success commission, which is its livelihood.

Bernd Zipper: You have other partners on board besides zipcon. The Northeast Association is also on board.

Jens Freyler: The Northeast Print and Media Association (“Verband Druck und Medien Nordost”) has been a partner from the very beginning. We are talking to other associations, and more may follow soon. Because the Print and Media Association recognizes the same issue, namely that there are companies in the industry that are having difficulties finding a successor and that a solution needs to be found. With the Northeast Print and Media Association, and we are open to other partners, we have designed the offer in such a way that association members receive the more comprehensive package, i.e., the consulting package, free of charge, apart from the success commission. That would come if we were really successful. It is important to us that quality is ensured on this platform, that anonymity is guaranteed, and that accuracy is ensured. And that’s why we’re happy to invest two or three hours on a phone call or video call to get to know each other and find a solution that we all feel comfortable with.

Bernd Zipper: I can only recommend that everyone take a look at this, even if they are not interested in selling their company or taking over other companies. Why? There’s an excellent M&A glossary there that explains the complex and sometimes weird terms that exist in the M&A business. After all, it’s good to know what it means when someone says, “Hey, you and I are going to make a great asset deal!”.

Jens Freyler: Yes.

Bernd Zipper: What usually happens when an entrepreneur calls you? What is the process, from the initial meeting to the possible sale?

Jens Freyler: When an entrepreneur calls us, we naturally first try to get a feel for the company and see what makes it special. What makes it special and what is the specific situation? And if the entrepreneur decides that we should tackle this issue together, then our task is to understand what is important to him. What is perhaps also important for him from the personal situation and for the company. That is central for me and an important task on which we spend a lot of time. We call that developing a “fact book”; something like a sales prospectus of the company. An entrepreneur often tends not to advertise their company or the sale to the world, making it confidential. That’s true. But nevertheless, we are talking about a sales process. And that means that when we sell something, we have to present it. We have to explain it, and perhaps we also have to document it in a striking way. And that’s what we do in the “Fact Book.”

In other words, this “Fact Book” collects facts about the company, it presents the history, the management, the team, the product structure, the customers – not everything in plain text, certainly a bit anonymized. But it presents the economic situation, the market situation, the planning scenarios and the potential that is seen. We put all this together in a paper and collect a lot of documents in parallel – which is what we need for this. In other words, the economic, legal and tax documents of the company that are needed later in the sales process. Once we have that, we start approaching potential buyers. Depending on how our client wants it, we either do this completely freely or we coordinate it individually with him. We can also draw up an exclusion list, and then we start approaching them. That means we approach the potential interested parties. We feel out personally whether this could be interesting, but do not reveal the name of the company at this point. If we feel there is serious interest, we decide on a confidentiality agreement so that all the information the prospect receives – and that’s a lot of information if he really wants to buy the company – that he has to keep it confidential. If that’s the case, then we send him the “fact book.” Then it usually goes into initial queries and then a personal meeting.

The entrepreneur has to be aware that if we approach several interested parties at the same time, several interested parties will want to come to his company and ideally see it in operation. That’s something you have to check to see if it fits. Does that happen in his company from time to time, or are the employees surprised when the entrepreneur suddenly goes through there three or four times within 14 days with Jens Freyler and some other people? When you get to that point, there comes a phase in which documents have to be provided, in which the interested party perhaps also involves its own M&A consultant or auditor or lawyers, and the details are examined. Our client also needs to be aware that at some point you talk about real customers, maybe do some sample calculations for products, and then we decide together which of those prospects are the most exciting. We then go into detailed negotiations with those. After that, it’s into contract negotiations, a contract drafting process, and then at some point to the notary appointment.

Bernd Zipper: Is there a rule of thumb for how long something like this takes?

Jens Freyler: My rule of thumb is always nine to twelve months. There are some people who say you have to spend five years on it, but I think that’s nonsense. It is possible to get basic information five years in advance and have a discussion with you or with us. You can deal with it beforehand, how such an evaluation works. And whether there are one or two things you can do to improve the valuation of your company. You can start doing that two or three years before. But the real M&A process may not take three or four years. Nine to 12 months is a realistic time frame. We noticed in the Corona period that everything was a little bit slower, felt like it took about two to three months longer. And maybe that’s still the case at the moment. You can’t be under the illusion that it’s going to be done in four weeks. The fastest case we ever had was that we went from the initial meeting to the notary appointment in five months. And that is really very fast. A lot of things fell into place.

Bernd Zipper: The topic of business valuation. How can I, as an ordinary entrepreneur, quantify the value of my company? Is there a rule of thumb that I can use to determine what my company is worth?

Jens Freyler: Yes, there is, but it’s not that easy. It sounds easy because the multiplier method actually takes the result as a basis. In the printing industry, you usually talk about EBITDA, which is earnings before interest, taxes, depreciation and amortization. You take the earnings and multiply that by a multiplier. My rule of thumb, if I want it really simple and quick, is I take EBITDA and I take that times six. That sounds super simple because it’s just two numbers that you have to multiply, and the result is right there. But it’s not quite that simple, unfortunately, because there are always exceptions. There are those who focus more on EBIT. There are those who look at EBITDAL, i.e., they include leasing, which makes a huge difference to the balance sheet of one printing company or another. It is always a question of which years you look at. Are you looking at the last few years or at the future? And: are there extraordinary effects or are there owner-relevant factors that cannot be extrapolated? For example, if someone only ever takes the bus and train and you say, “But he could also have an Audi A4 as his manager. Or the reverse example, someone has two Ferraris in the company, and you say that’s more of a private pleasure that can be corrected. In the end, it’s all about sustainable, adjusted EBITDA. And this sustainable adjusted EBITDA can sometimes not be calculated in two minutes.

Bernd Zipper: That’s one point where we work together. As zipcon, we also prepare companies to be ready for sale at some point. And we have had one or two cases where we have visited companies together long before a sale, looked at the structures, and then worked for two years to enable the companies to be sold. By adjusting small “luxury goods”, or by rethinking procedures and processes, and perhaps the way in which machines are used and deployed. These are topics where we work together.

Jens Freyler: Yes, absolutely. There is the term “window dressing,” making a company pretty for sales. I don’t think much of that, because if you just dress it up and you have an experienced counterpart, he’ll recognize what you’ve made pretty, and he’ll count it out again. What you can do, two to three years in advance, is really take an operational look at the company and ask yourself, “What can we change that really does something for the structure of the company, for our earning power, and therefore for our enterprise value?” And that’s usually worth the effort, because it pays off when you get the purchase price transferred later.

Bernd Zipper: How do you see the chances of finding the right partner for a company in the printing sector at the moment?

Jens Freyler: I still see the chances as very good. To elaborate a bit: I worked for many years at a major German bank in corporate customer service. And I remember that around the year 2000, the topic of “paperless offices” came up and it was said that companies in the printing industry would soon have no more orders. Now we have arrived in 2021, my office is still not paperless and there are still printers. Yes, newspaper publishing will continue to have declining circulations, magazines, inserts; there are many issues that are not easy in the printing industry. But there is no end to the printing industry, it will continue and there will always be innovation and interesting and exciting developments. If you look at the M&A market in general – I recently read this in a statistic or an evaluation – we had 2.3 times as many transactions in the first half of this year than in the first half of 2020. If we remember: the first half of last year was three months Corona, three months normal. So this year – and we still have Corona – there we had 2.3 times as much compared to a six-month period, some of which was still completely unaffected by this issue. That means there’s an extremely large amount of money in the market, liquidity is high and investors, strategists, well-positioned strategists, are looking for investment opportunities. That’s good for now, and it’s going to stay that way. In addition, a situation where it’s actually always ideal to go into a company sale is when you can post better numbers month after month. If you give the go-ahead today, it would mean that you would be holding talks with interested parties in February, March, April. And I’m hopeful right now that we’ll see positive trends month over month in February, March, April next year. Declining Corona numbers, increasing circulation, events are happening again and that’s really a good phase.

The only downer I have is that debt plays a role in a business valuation like this. And certainly one or two entrepreneurs have taken out a Corona loan or have a weaker liquidity situation at the moment and of course that puts pressure on the company value. But that should improve in the next six or nine months. So, if we think again that such a process takes nine to twelve months, then there is nothing wrong with starting it today.

Bernd Zipper: Thank you. That was important information if you want to have an insight into M&A in print. I recommend taking a look at I would like to discuss the topic of business valuation with you another time, so that one knows what the factors are in business valuation in print. But for today, thank you, Jens.

An interview on selling a company: "I don't believe in 'window dressing'"
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An interview on selling a company: "I don't believe in 'window dressing'"
Do you know how much your business is worth? Or what you should look out for when it comes to buying or selling a business? No? Then you should definitely tune into the latest episode of the Beyond Print podcast! Because that's exactly what Bernd Zipper discusses with Jens Freyler, Managing Director of the Hamburg-based consultancy, Knox, and initiator of, the new business exchange for the printing industry.
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Für viele in der Druckindustrie ist sie keine Unbekannte: Fast 14 Jahre lang war Judith Grajewski für das Fachmagazin Deutscher Drucker tätig; hat als Redakteurin vor allem über den Wachstumsmarkt Digitaldruck berichtet, als Online-Verantwortliche das Portal und die Social-Media-Kanäle mit aufgebaut und sich als „Transaction Editor“ mit Content-Management- und Marketingstrategien beschäftigt. Nach einem kurzen Intermezzo als Chefredakteurin des Werbetechnik- und LFP-Fachportals Sign&Print beim schwedischen AGI-Verlag, bleibt die studierte Dipl.-Ing. für Medientechnik (FH) ihrer Leidenschaft für Print treu und widmet sich nun der Beratung und Projektbegleitung von Druckunternehmen auf ihrem Weg in eine digitalisierte Zukunft. Darüber hinaus gibt sie als Redaktionsleiterin von Beyond Print regelmäßig Einblick in relevante Themen des E-Business Print. (Profil bei Xing, LinkedIn)

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