David Miller, a principal in H.I.G. Capital’s Miami office, has a productive history of working with both suppliers and distributors in the $23.6 billion promotional products industry. During a Q&A on Tuesday with ASI president and CEO Tim Andrews at the 2018 ASI Power Summit in Tucson, AZ, Miller assured the audience that the promo industry is becoming even more attractive to private equity investors like H.I.G.

“It’s a very large industry,” Miller said. “It’s continuing to grow. Promotional products are here to stay. Their CPI is among the best value out there.”

H.I.G. currently owns Top 40 supplier BIC Graphic (asi/40480). The firm had previously owned Top 40 distributor HALO Branded Solutions (asi/356000) before selling it in 2007. H.I.G. originally bought HALO out of bankruptcy in 2003. The PE company had also owned, then sold, U.K.-based distributor Brand Addition (asi/202515).

ASI CEO Tim Andrews interviews David Miller of H.I.G. Capital at the ASI Power Summit.

When asked what makes a company attractive to investors, Miller said, “They’ve got to be growing. They have to have diversity across customers, products and suppliers, with strong cash flow. If they’re heavily concentrated in one area, it’s not good.”

Miller said the promo industry initially surprised him, getting a big laugh when he told Andrews, “I was surprised how many industry conferences there are that are social events.” But, he said, that’s a plus. “It’s surprising how close everybody in the industry is,” he said. “Business is done at such a personal level – and that’s definitely a good thing.”

PE-acquired companies shouldn’t expect much meddling, at least not from H.I.G., Miller said. “We’re not in everybody’s hair. We’re not involved in the nitty gritty. That’s not us.”

Why, Andrews asked, would a company that’s doing well on its own want to bring in investors? In short, said Miller, because investors can deliver resources and experience and allow owners to stay involved, among other benefits.

Although the economy is roaring, a slow-down is inevitable, Miller said. But don’t worry – promotional companies will remain attractive to investors. “Even if the industry slows down like it did during the last recession it won’t scare us away,” he said. “We’re still interested.”

Still, it’s imperative for industry companies to invest more in the technology and equipment that will enable them to get orders out at an Amazon-like pace. “My hope is that within five years, that evolution will have taken place,” Miller said.