Posts Tagged risk management
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
Value Insights
Posted by Packard Acquisition Research in Acquisitions, Business valuation, business finance, Mike Tikkanen, Packard Acquisition, Risk on January 25, 2009
What We Know That Just 
Ain’t So, or
Value Insights
Unanticipated mundane external factors are most often responsible for dumping our transactions into the 80% that don’t add value category.
Carefully developed evaluation and due diligence models offer the best chance of uncovering the questions that if answered properly, will cause us to avoid the failures that affect the great majority of acquiring companies.
To have great evaluation and due diligence models without a strong team that can recognize, develop, and work with the tools will drop you short of your goals also.
The assumptions made in the board room about the talents, team members, roles, responsibilities, systems, and procedures, determines the accuracy of the search and the effectiveness of the due diligence.
A smart team with the right resources can execute the complex task of acquisition at a far lower risk factor than a half smart team with almost the right resources. The losses can be staggering. The investments in team and resources are quite modest in comparison.
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Severed Connections
Posted by Packard Acquisition Research in Acquisitions, Business models, M&A,, Mike Tikkanen, Packard Acquisition, Risk on January 19, 2009
Severed Connections
The deal was done. Economically, fair to all the principals involved.
This was an asset sale of a near bankrupt electric motor/transformer manufacturer. What the principals failed to consider was that the employees had felt severely undermined in the transaction. Vacation pay was not paid, benefits not taken were eliminated; things of this nature were taken personally by the rank and file.
The level of employee frustration was made evident when they were tasked with loading the assets onto trucks that would take them to the new owners in MN.
25MM worth of motors and transformers were quickly reduced to scrap value by disgruntled employees clipping wires and electrical contacts as equipment was being packaged and loaded for shipment.
Any amount of nonfinancial investigation would have uncovered the issues. Almost certainly some other path could have been found to avoid the total destruction of value that did occur. Calculating even the highest possible costs of due diligence against the almost total loss of purchase price would show a miniscule investment in risk management.
