Posts Tagged Cliff Allen
Mitigating Acquisition Risk July 15
Posted by Packard Acquisition Research in Acquisitions, Cliff Allen, Occasional authors, Risk on June 27, 2009
ACQUISITION / JOINT VENTURE BRIEFINGS
Posted by Packard Acquisition Research in Acquisitions, Business models, M&A,, Mergers, Packard Acquisition, Risk on May 27, 2009
Finding more & better target candidates
& reducing transaction risk
Individually Tailored to your company strategy and acquisition team
Two half day briefings
Summer and Fall dates available
Mike@PackardAcquisitions.com 952-542-9318
CAllen@PackardAcquisitions.com 651-226-2853
Acquisition Potholes
Posted by Packard Acquisition Research in Acquisitions, Business valuation, business finance, Cliff Allen, Equity, Risk on April 4, 2009
ACQUISITION POTHOLES:
The Facts:
A KPMG study conducted in 2000 determined that only 17% of Mergers and Acquisitions examined created a substantial return and, even more discouraging, 53% destroyed value. Validating these findings, a six year study by Business Week showed that 61% destroyed value that existed prior to the acquisition (BW October 14, 2002).
Why?:
Acquisitions run a high risk of failure…there are many potholes on the road to achieving a successfully integrated and operating acquisition that is contributing to the worth of the enterprise.
A few of the causes of these discouraging statistics can be found in the steps of the process, including:
1. Defining criteria for the ideal target
2. Conducting a ‘pull’ search (rather than waiting for an intermediary to ‘push’ a prospect at you)
3. Researching, gathering information, evaluating, qualifying and profiling the candidates
4. Organizing, managing and comparing the data gathered
5. Ranking the candidates based on the criteria
6. Making a strong and seamless connection between buyer an seller
7. Negotiating in good faith
8. Effective due diligence by competent and qualified experts – not only finance and legal, but risk, technology, branding, etc.
9. Looking beyond traditional due diligence into the human factors of the organizations
10. Having a financial and tax plan in place that will optimize the transaction value (but not the cost)
11. Maintaining current information on the candidate so that material changes are identified
12. Successfully negotiating a fair transaction (or pushing back from the table if things aren’t progressing satisfactorily)
13. Integrating the businesses (to the level desired) quickly and effectively
13. Continuing to manage the new organization with an understanding and appreciation of the corporate memories
A stumble in any area can cause an acquisition to derail (or at at a minimum, to underachieve.) Rely on experts who have successfully driven this road before.
Cliff Allen
Packard Acquisitions
Researching and Profiling
Privately Held Companies for Acquisition
Office/Cell: 651-226-2853
Facsimile: 651-578-7567
Have something to add?
Got a different point of view, want to play devil’s advocate, or just think we’re all wet? Post your experiences or examples.
Effective Use Of Talent
Posted by Packard Acquisition Research in Acquisitions, Business models, Business valuation, business finance, Cliff Allen, M&A,, Mergers, Packard Acquisition, Risk on March 19, 2009
EFFECTIVE USE OF TALENT
The challenge for the CEO of a company that wants to grow through acquisition is that the CEO is also charged with running the company. This presents a conflict even in larger businesses that have a dedicated ‘corporate development’ or an ‘M&A’ function. Too often, an ad hoc acquisition team is recruited from daily jobs and, as a result, neither the acquisition search nor the daily job is done as well as it must be. No wonder that acquisitions take too long and rarely deliver the value expected.
Compounding this is the attitude that “our industry is small” or “I know all the players”, but the truth is that until you take an objective and broad based look at the opportunities, you really don’t know what will fit the best. An external perspective is of great value because an expert doesn’t bring a lot of baggage in the form of preconceptions about what might add real value.
Consider using a ‘retained search’ firm for finding and researching acquisition targets. An extensive and well-defined search will allow you and the team to focus on the highest and best use of your time - evaluating the best candidates for acquisition. After all, the objective is to improve the success rate of your M&A transactions.
Cliff Allen, Packard Acquisitions
Researching and Profiling
Privately Held Companies for Acquisition
Office/Cell: 651-226-2853
Have something to add?
