When To Sell Your Business

Converted paper product manufacturing by revenue:

1. Corrugated & Solid Fiber Boxes(32.0%)
2. Paperboard Containers (27.0%)
3. Paper Bags & Coated Paper(20.0%)
4. Sanitary Paper Products (12.0%)
5. Stationery Products (5.0%)
6. Other (4.0%)

The paper product industry in the United States is thriving, with over 2,100 manufacturers across the country. And in the heart of it, all is California, home to 907 of these innovative and resilient companies; according to Dun & Bradstreet. 

California & US Converted Paper Product Manufacturing Landscape

A typical paper product manufacturer employs 117 workers and generates $57-58 million annually.

• Did you know: The paper product manufacturing industry consists of about 2,100 companies that employ about 272,500 workers and generate $123 billion annually?
• The 50 largest firms account for 62% of industry revenue.
• Some large companies are vertically integrated and own paper mills.
• Large companies include Kimberly-Clark, WestRock (formerly RockTenn and MeadWestvaco), and Amcor (Bemis Company).

Source - Virtual IQ | NAICS 3222, SIC 265x, 267x

In the heart of California, a powerful shift is happening in the world of industrial paper products and converted paper product manufacturers. More and more of these businesses are now in the hands of passionate small and medium-sized companies, that are dedicated to driving innovation and sustainability in the industry. 

These businesses now account for a remarkable 51 percent of the market in California alone, highlighting the growing influence of these bold and visionary entrepreneurs.

A recent study showed that the share of converted paper product manufacturers owned by 

• female entrepreneurs are 13% 
• followed by 12.1% veteran owned 
• and finally, 6% are owned by minorities.

Forty-nine percent are classified under a corporate entity.

Get Your Copy Of The Full Paper Products US Industry Report - DOWNLOAD NOW

Buy and Sell Activity 

The converted paper products manufacturing industry saw steady M&A activity in 2022, with over 5 mergers and acquisitions. 

According to Vertical IQ Converted Paper Manufacturing Industry Report, Sales for the US paper products manufacturers industry are forecast to grow at a 1.18% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy.

California dominates the paper product manufacturing industry in the United States, with an impressive 43% of all establishments calling the Golden State home. This high concentration of manufacturers not only highlights California's position as a major player in the industry but also underscores the state's importance as a key contributor to the national economy.

Rogerson Business Services has been facilitating the buying and selling of manufacturing companies in California for over 16 years, since 2006. The company has a wealth of experience in handling a diverse range of manufacturing-related businesses in various niches and sectors. Notably, in 2021, Rogerson Business Services successfully brokered a $36 million manufacturing company deal, a testament to their expertise and track record in the industry.

Send us an email to support@rogersonbusinessservices.com and get the full list of manufacturers sold. 

The market outlook in California is positive, but several factors can affect this market environment.

Let’s dig in…

When Should I Sell My Business?

It's never easy to say goodbye to a business you've built from the ground up. But sometimes, the right decision is to sell and retire. So how do you know if 2023 is the right time for you to sell your manufacturing company? Here are 5 key factors that can help you make that decision with confidence.

1) Interest Rates 

The paper products manufacturing industry is ripe for investment, attracting private equity firms, strategic buyers, and acquirers alike.

As the market conditions reach a fever pitch, there's never been a better time to sell your lower middle market converted paper product manufacturing business in California. With current interest rates making it an ideal situation for strategic buyers, this could be your chance to cash in big time!

Into the bargain, with the Federal Reserve's recent actions towards keeping high rates elevated long-term, this is an opportunity not to be missed! 

Selling your manufacturing business now promises to bring you closer to achieving your financial dreams and securing a brighter future for yourself and your loved ones. Don't wait any longer; seize this perfect economic opportunity and watch your profits soar.

2) Potential Strategic Buyers

California's paper product manufacturing industry boasts some of the most coveted strategic buyers in the market. These industry giants have a keen eye for identifying investment opportunities that align with their business goals, and the Golden State is where they're setting their sights. 

With a thriving ecosystem of innovative businesses, California is an ideal destination for strategic buyers looking to expand their portfolios and stay ahead of the curve within these hot subsectors of the industry below:

• Corrugated & Solid Fiber Boxes
• Paperboard Containers
• Paper Bags & Coated Paper
• Sanitary Paper Products
• Stationery Products

Take this acquisition for example from the perspective of a strategic buyer. 

As a strategic buyer in the same industry, the acquisition of another similar company can be a highly strategic move. 

In this case, the acquisition of a majority interest in Corrugated and Packaging LLC by US Corrugated is a significant move toward expansion and growth. 

The following are the main reasons for this acquisition:

• Increased market share: US Corrugated is acquiring a majority interest in a leading independent corrugated packaging company, which will give it a more significant market share in the industry. This increased market share is essential to remain competitive and increase profitability.
• Access to new technologies and capabilities: With the acquisition of Corrugated and Packaging LLC, US Corrugated will gain access to new technologies and capabilities that it can use to improve its products and services. This will help them to stay ahead of the curve and meet the evolving needs of their customers.
• Geographic expansion: Corrugated and Packaging LLC has a presence in several regions, including the Northeast, Midwest, and Southeast. By acquiring the majority interest in the company, US Corrugated can expand its geographic footprint and enter new markets, leading to increased revenue and profits.
• Synergies and cost savings: The acquisition can create synergies between the two companies, leading to cost savings in areas such as procurement, logistics, and manufacturing. This will help the company to improve its margins and profitability.
• Access to new customers: With the acquisition, US Corrugated will have access to new customers, leading to increased revenue and profits.

Acquiring a business in the same industry is like unlocking a treasure trove of opportunities. It offers the chance to expand your market share, access cutting-edge technology and capabilities, explore new geographical regions, and gain access to a fresh pool of customers. 

All of these factors can give your company the edge it needs to achieve new heights of growth and success. These are just some of the reasons why strategic buyers in California are eagerly seeking out converted paper product manufacturers, and why the potential benefits of such acquisitions are truly worth the investment.

3) Abundance of Capital 

Meet Andrew Rogerson, a seasoned M&A advisor with over 20 years of experience in the field of mergers and acquisitions. As a baby boomer himself, Andrew has made it his life's work to help fellow baby boomers navigate the complex world of selling a business and retiring.

Andrew's passion for helping baby boomers retire with dignity and financial security is what led him to start his own business, Rogerson Business Services, a lower middle market advisory firm specializing in value and selling businesses in California. 

He knows firsthand the challenges that business owners face when it comes to exiting their companies, and he is committed to helping them achieve their goals.

With the release of Preqin's 2023 Private Equity Outlook report, Andrew couldn't help but feel a sense of excitement for his clients. The report predicts a strong private equity market in the coming year, with record amounts of capital available for investment.

As Andrew sat down with his clients to discuss the report and its implications for their businesses, he felt a surge of hope. He knew that many of his clients had poured their hearts and souls into building their businesses, and the prospect of selling them could be overwhelming.

But with the private equity market expected to grow, Andrew knew that now was the time to seize the moment and leverage excellent business prospects with ample capital accessible. 

He encouraged his clients to prepare their businesses for sale, highlighting the importance of focusing on valuation metrics and keeping financials impeccably organized.

Andrew also emphasized the importance of differentiation, selective investment, and ESG considerations for private equity firms seeking to succeed in the current market. 

He knew that investors were increasingly focused on the ESG performance of the companies in which they invest, and private equity firms were responding by incorporating ESG considerations into their investment processes.

Andrew's clients felt a newfound sense of confidence as they prepared to sell their businesses. 

With the enormous amount of cash held in S&P 500 entities and private equity funds, they knew that there was a strong desire to invest in well-established businesses over the next year.

As Andrew watched his clients successfully sell their businesses and retire, he felt a deep sense of satisfaction. He knew that he had played a small but significant role in helping them achieve their dreams.

For Andrew, the Preqin 2023 Private Equity Outlook report was not just a report, but a sign of hope and opportunity for his clients. And with his guidance and expertise, they were able to make the most of this optimistic market trend and secure great deals.

As Warren Buffett famously said, "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." And with Andrew's help, his clients were able to put out the bucket and secure their golden opportunities.

4) Taxes & Tax Planning  

As an M&A deal team operating in California, we understand the complex nature of taxes and their impact on businesses. 

For lower-middle market manufacturing owners looking to sell their business in California, it's important to know that recent changes in capital gains tax laws offer opportunities to reduce tax liabilities.

The California Department of Tax and Fee Administration (CDTFA) has introduced a new option that allows business owners to defer their capital gains tax by investing in Qualified Opportunity Zones (QOZs). 

By taking advantage of this option, businesses can reinvest their profits into areas that need it most, all while potentially reducing their tax liability.

Moreover, the Tax Cuts and Jobs Act (TCJA) has introduced further benefits for business owners. For instance, the Section 199A deduction can provide significant tax savings for eligible businesses, while the doubling of the estate tax exemption can be a game-changer for those looking to transfer wealth to future generations.

We understand that capital gains tax can be a significant concern for many business owners, but we want to reassure you that there are now several options available to help reduce the burden. 

By staying informed and seeking the advice of qualified professionals, business owners can navigate these changes and potentially reap significant benefits. 

As an M&A deal team, we specialize in helping converted paper product manufacturers save money on taxes when selling their manufacturing business, so please don't hesitate to reach out to us for guidance and support.

5) Should I Sell My Manufacturing Business Now?

Attention converted paper product manufacturers in California! 

There's a golden opportunity for you to make strategic decisions that could lead to tremendous growth in the coming years.

You may be wondering, "Should I wait until 2028 for the optimal exit or capital raise opportunity, or take advantage of potential growth now by assessing the market conditions of early 2023?" 

It's a tough decision, but Rogerson Business Services is here to help you make the right call.

With years of experience and a proven track record, Rogerson Business Services has helped numerous businesses achieve successful exits and maximum valuations. 

Just ask some of our satisfied clients who have seen their dreams come true with the help of Andrew Rogerson and his deal team.

The 2022 business trading climate was fueled by several factors that are expected to continue in 2023, and Rogerson Business Services has defied expectations and continued to thrive, setting an impressive trend of growth for years ahead.

Despite potential challenges, such as timing and economic cycles, there is a reason for optimism in the buy-sell market. With appropriate strategizing and planning, you can position yourself for valuations that maximize profits later down the road.

Don't let this opportunity slip away! 

Let Rogerson Business Services guide you through the process and help you achieve the success you deserve. Contact us today to learn more about their successful exits and how they can help you achieve yours.

See the case study! 

Positioning Your Paper Product Manufacturer For An Acquisition

Congratulations, you've poured your heart and soul into building your paper product manufacturing business in California. You've overcome countless challenges and achieved great success. But now, it's time to take the next step – selling your company through a strategic acquisition.

The process can be overwhelming but don't worry. With the right approach, you can maximize the value of your life's work and set yourself up for success.

One of the most crucial steps is preparing your financials. Potential buyers will scrutinize your records, so it's essential to make sure everything is accurate and up to date. 

Don't know where to start? Don't worry. Andrew Rogerson, a seasoned M&A advisor based in Sacramento, but covers the whole state of California, can help you navigate this process with ease.

But that's not all. Streamlining your operations is equally critical. Andrew Rogerson can work with you to identify areas where you can optimize efficiency and reduce expenses, ultimately demonstrating your business's potential to potential buyers.

And let's not forget about understanding your business's unique value proposition. With Andrew Rogerson's guidance, you can identify your company's strengths and weaknesses, enabling you to present them accurately and transparently to potential buyers.

Selling your manufacturing business can be emotional, but remember, the decisions you make now will impact the value of your business in the future. Don't wait until 2028 for the optimal exit or capital raise opportunity. Instead, take advantage of the current market conditions in early 2023.

With the 2023 buy-sell converted paper products manufacturing trading landscape looking particularly bullish, now is the perfect time to act.

Don't leave your company's future to chance. 

Contact Andrew Rogerson and his team at Rogerson Business Services to start your valuation and exit plan today.

As Warren Buffett said, "Price is what you pay; value is what you get." Make sure you get the value you deserve for your life's work. With Andrew Rogerson and Rogerson Business Services on your side, you can rest assured that you're in good hands.

Articles and Videos Worth Checking Out:

1) 2023 Market Policy and Outlook

2) Baby Boomers Infrastructure & 2023 Outlook

3) California Manufacturing Facts

4) Occupational Employment and Wage Statistics

5) The Target Report - M&A Paper Product Industry 

Web Links:

Packaging Technology

News, trends, and statistics on the packaging segment

American Forest and Paper Association

Reports on various paper products categories (containerboard, boxboard) from industry association

Packaging Digest

News and trends

Paper, Film, and Foil Converter

News and trends

Get Your Copy Of The Full Paper Products US Industry Report - DOWNLOAD NOW

Final Take

If you are a retiring business owner looking to exit your lower middle market manufacturer in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower middle market manufacturing business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3.  Know what's your company's worth. This is an essential step to take when planning to sell your manufacturing business in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to negotiation to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower middle market manufacturing business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market manufacturing company or still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisor

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