A Discussion Regarding Consolidated Graphics: Jim Cohen, Executive Vice President – Mergers & Acquisitions, Consolidated Graphics Inc.

On January 26th 2010 Jim Cohen, Executive Vice President of Mergers and Acquisitions for Consolidated Graphics Inc, spoke at the Leadership in Corporate Divestitures and Acquisitions meeting. The purpose of this talk for Cohen was to discuss some of the strategies utilized by the company.

Cohen began the crux of his speech by stating that the business model of Consolidated Graphics is simply to buy companies. While confusing to some, Cohen stated that these companies are not integrated, which means they operate independently of each other. Sometimes, he continued, they actually compete against each other.

This model works, according to Cohen, because Consolidated Graphics regards each of their sister companies as a customer. “One of the ways we drive that home is by compensating our presidents for intra-company sales.  It's a small piece of their compensation structure but the message is: Treat your follow presidents like a customer and you know you're making money because of it.”

Speaking next about the strategic advantages possessed by Consolidated Graphics; Cohen stated that because most of the competitors within the industry are struggling, his company is able to hire staffs from those companies. He also stated that strong cash flow means that the company does not need to get any sort of approval.

In terms of how the company is viewed by acquisition targets, Cohen stated that Consolidated Graphics is fortunate to be the buyer of choice regardless of the state of the economy. “We have the strongest balance sheet and that's a great selling point for us.  There's no financing contingency.” Another advantage pointed to by Cohen was that most printing companies are similar in nature to Consolidated Graphics, which makes it easier to negotiate deals.

Next, Cohen discussed the history his company has with acquiring family owned businesses, stating that in these times, there is no real persuading these businesses to sell, you simply have to be there at the right moment. He added that when it comes to acquiring a family business, the most important thing is to let the owners know that their people will be taken care of.

Speaking briefly regarding how Consolidated Graphics is future oriented, Cohen then noted that the company has a training program selling point for sellers. “We're bringing in fresh blood and getting these kids excited.  Some of them are running our companies; some of them are selling and owners like that. “

Later, Cohen commented that he believes Consolidated Graphics has the best pure group in the industry, in which people can get together to learn from each other. Citing some other reasons for the success of the company, Cohen mentioned things such as: The CEO not falling in love with deals, and not building acquisition growth into any forecast given to Wall Street, which means there is no pressure to perform transactions.

Cohen then concluded his speech by stating that Consolidated Graphics hires all employees from acquisitions. “We just say, 'Hey, look. You're a good company.  We're buying you because you're a good company.  Perform and continue to perform and you're the one who's running that company.”