The hidden cost of acquisition

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Tom was a proud father. After ten years in lesser positions at his business, his two children (Sara and Jim) were to begin higher level participation. Tom did have a lot to be proud about – his mom and pop shop had grown into a multi-million dollar enterprise that was a significant employer in an out-state town and his children had completed college and had chosen to be part of the family business. Continue reading “The hidden cost of acquisition”

Risk Management Discussion Thread

african art 2The following are the astute observations of Carl Hagberg, pulled from an online acquisition Risk Management conversation about M & A, shareholder value, and strategic issues. My comments (that Carl refers to) follow in the More section.

Carl is Editor and Publisher at The Shareholder Service Optimizer
Greater New York City Area http://www.optimizeronline.com/

& he is Chairman & CEO at Carl T. Hagberg and Associates

As an investor, I am extremely concerned by the perfectly awful returns on investment – overwhelmingly terrible ones as the above-cited numbers point out – that have been booked year after year as a result of bad acquisitions by public companies. Continue reading “Risk Management Discussion Thread”

ACQUISITION / JOINT VENTURE BRIEFINGS

SunsetFinding more & better target candidates

& reducing transaction risk


Database Building & Contact •  Measurable Criteria  •  Risk Management  • Integration
 

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For more information contact: 

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CAllen@PackardAcquisitions.com 651-226-2853

www.packardacquisitions.com

 

Better Tools for Finding Better Prospects
Better Prospects = Better Transactions
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Value Insights

 

 

What We Know That Just jimearlyphotoAin’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.

 

 

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.

 

Brought to you by;                                         www.packardacquisitions.com

Severed Connections

 

Severed Connections

 

The deal was done.  Economically, fair to all the principals involved. 

 dscn0202

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.

 

An ounce of prevention.

 

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.                                                                                                                                                                                            Brought to you by;                                         www.packardacquisitions.com

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