Tag: seller’s equation

Renault – Fiat Chrysler Merger Collapses: Lessons for Strategic Acquirers

It became clear discussions could go no further and so the Fiat Chrysler-Renault merger collapsed just barely a week and half after it was first announced. A peak behind the scenes reveal a number of lessons to learn from this failed merger. Pay attention to cross-border issues Many reports note that Fiat failed to win …

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Why Do Owners Really Agree to Sell?

How many of you would say your most recent hire agreed to join your organization purely for financial reasons? Most employees take other factors into consideration including benefits, location, job description, your company’s mission, and “fit” with your company’s culture. The financial side is certainly important, but leveraging these other factors is critical, especially when …

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6 Reasons Sellers Get Spooked in Acquisitions

Sarah’s company had been speaking to the prospect for months and was almost ready to sign a letter of intent, when all of a sudden, the seller changed his mind and walked away from the deal. Sarah and her team were stunned and left asking, “What happened?” Unfortunately, deals do fall apart for a variety …

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Does the Highest Bidder Always Win the Deal?

The short answer to this question is no. Some owners may sell to the highest bidder, but this is not always the case. Differentiating by price alone is problematic for a number of reasons, the most obvious being that someone can always outbid you. In addition, when it comes to privately-held transactions, especially, we find …

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Why Acquisition Is Not All about Price: Amazon Acquires Souq

Many are convinced that the buyer with the most money always wins the deal. Although many acquisitions by financial acquirers and strategic buyers are driven by the desire to grow revenue and the company’s bottom line, it is possible to win an acquisition without offering the most amount of money. A successful acquisition is about …

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What Is the Guideline Public Company Method in Valuation?

The Guideline Public Company (GPC) Method is one of the more popular valuation methodologies because people often hear about it in the news or in presentations. This method identifies prices for individual shares of publicly traded companies that are subject to the same industry dynamics as the subject company (the company you are trying to …

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What Do You Have to Offer an Owner?

“Why should I let you buy my company?” Chances are an owner will ask you this question during the course of your acquisition and you must have a convincing answer. While the strategic fit and benefits of an acquisition may be abundantly clear to you, an owner may not share your perspective. As a leader, …

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Remembering the Human Factor in M&A

For an owner of a privately-held company, the business is their baby and using hard-nosed tactics to negotiate for the lowest price is ill-advised. The human factor cannot be overlooked when pursuing M&A and establishing trust with an owner is critical. Buying a privately-held business is not like buying a car where you can negotiate the …

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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 …

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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 …

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