It can be easy to get stuck in the rut and slip into a routine. Far too often leaders stay the course simply because “it’s how we’ve always done things.” However unintentionally maintaining business as usual can be extremely dangerous for the future of your organization. The reality is that as time passes, your markets, …
Category: M&A and External Growth
Microsoft and LinkedIn Use Acquisition to Combat Stagnant Growth
Microsoft has agreed to acquire LinkedIn for $26.2 billion. This is a massive transaction in the marketplace and is the largest acquisition by Microsoft to-date. At $196 per share, Microsoft will pay a 50% premium over LinkedIn’s closing shares on Friday, June 10. LinkedIn will continue to operate as a separate entity. There is also $725 …
How to Negotiate When a Company Has Two Owners
Q: When a company has two owners that are equally involved is it advisable to ask them to choose only one negotiator, especially at the final stages? A: Negotiating with one owner of a company and convincing them to sell their business can already be challenging. The situation becomes more complex when the company you wish to …
How to Avoid Irrational Decision-Making in M&A
Most people tend to go with their “gut” when making decisions rather than relying on the accurate data. You might think you’re the exception, but studies conducted by psychologists Daniel Kahnerman and Amos Tversky show that “when it comes to decision-making, humans are predisposed to irrationality.” No one likes to think of themselves in this …
When Is the Best Time to Do M&A?
Some might say the best time to pursue an acquisition is when the right opportunity comes along, but they’re wrong. The best time to pursue M&A is whenever you are ready. The best opportunities are those that you seek out proactively. If you wait around for opportunity to come to you, you may be missing …
Deal Changer or Deal Breaker? Assessing Risk in Due Diligence
During formal due diligence, which typically begins after signing the letter of intent, you gain access to in-depth information and begin taking a closer look at the acquisition target. Traditionally the primary purpose of this stage of the M&A is to identify significant risks that could impact the terms of the deal or put it …
How to Measure Company Culture
Culture is an important part of an organization, but it can be difficult to define. Unlike other areas, such as finance and operations, which have concrete metrics like revenue, EBITDA, and number of employees, quantitatively measuring culture can be challenging. Leaders often rely on their “gut” to understand another company’s culture, but this leaves an …
Mixed Reports on Middle Market Growth
Middle market deal activity reached its lowest level since 2009, according to Mergers & Acquisitions. This may be a result of concerns about the upcoming U.S. presidential election and because banks are shying away from lending to private equity-backed deals. While middle market M&A activity is down, when compared to 2015 levels, the middle market …
Strategic Buyers Hungry for Acquisitions
Recent analysis shows that deal activity reached $435 billion in the first quarter of 2016 in North America and Europe. This is the second highest total on record and 84% of the deals were executed by strategic buyers. Companies with lots of cash on their balance sheets and are now willing to deploy some of it …
Do You Really Understand the Seller?
We recently had a situation where our client, the buyer, was pursuing the acquisition of one of their suppliers. The buyer expected the process to be relatively easy because he and the seller had known each other for years. However, when he tried to speak to the owner about possibly selling his company, he was …
