SUCCESSFUL ACQUISITIONS

M&A Insights from David Braun and Other Experts

Latest Articles

Your Company DNA

At Capstone, we talk a lot about “company DNA”. It’s a big focus when we are at the early strategic stage with a new client.  At the outset, we encourage them to ask themselves, “What’s our DNA?” The company DNA cannot be read off a nicely worded mission statement hanging in your reception area. It […]

A Case For Negative Thinking

I once had a client that made fish products for manufacturers who in turn created packaged delicacies for the end consumer. My client was tempted at one stage to drift into making consumer products themselves. But they had absolutely no experience or competence in this area. It seemed just a step away, but actually there […]

Finding Your Core

Here’s one principle that Capstone lives by in its work with growing clients. Before you go buying someone else’s company, be sure you fully understand your own. This requires asking a few simple but powerful questions, such as: “What is your core competency?” Companies, like people, often have mistaken ideas about where they truly excel. […]

The Funny Thing About Market Cycles

Why do stock market investors sell when prices collapse and buy when prices soar? Why do real estate owners display the same irrational behavior? The math is hardly difficult. It’s better to buy when valuations are low and sell when they are high. Yet human nature seems to require that we run with the market […]

External Growth: The Creative Approach

Officially, there’s been a drop of some 27% in M&A deals in the past year. In reality, this number is skewed by the large deals. In the markets where Capstone plays — mostly deals under $1 billion — there is a drop in activity but not to this catastrophic degree. There are still plenty of […]

When To Sell, Or The Lessons Of Procrastination

Here’s a recent exchange between the two principals in an acquisition we are advising on. Seller to buyer, “So what’s your exit strategy?”  An odd moment in the circumstances. Usually, the last thing M&A buyers have on their minds is offloading the newly combined entity. Seems a bit like talking about divorce at a wedding. […]

The New M&A Consultants

In my last post I commented on the opportunity that has risen in the mid-market with the concentration of investment banking focus on major deals. There’s a chance for third-party advisors like Capstone to do more than fill the vacuum recent events have created. However, it’s important to understand what the gap really is — […]

Where Did All The Investment Bankers Go?

The short answer is: they got bought up by massive banks. The rapid consolidation of the investment banking industry is one of the most dramatic developments amidst the recent financial turmoil. The independence of the old IB firms has vanished, consumed by monolithic multi-function institutions like Bank of America. The real question is, what does […]

HOW TO EAT THE M&A ELEPHANT

If you’re thinking of buying another company, the scale of your projected acquisition is an important question you need to settle early on. Your objective is growth, and it would be easy to deduce from this that the bigger your purchase, the better. Not so. You’ve heard the familiar question, “How do you eat an […]

Acquisition Goals

Companies buy companies to grow, but that doesn’t tell the whole story. In reality, there can be multiple reasons for an acquisition. Here’s a snapshot of some of the most common: Increase Top Line Revenue – The ultimate objective in any business is higher earnings, and to reach that goal you will eventually have to […]

M&A: THE STATE OF PLAY

I was struck by Matthew Karnitschnig’s excellent article in yesterday’s Wall Street Journal. His opening line was perhaps an overstatement — “M&A is almost dead”. But the gist of his piece is right on the money. Mr Karnitschnig’s theme is the one I have been pounding in this blog for the past few weeks. In the world of […]

Why Buy?

If  you are contemplating growth through acquisition, let me offer one rather obvious piece of advice. Know why you are buying. At Capstone, we impose a strict and simple rule. Have ONE reason, and one reason only. A single reason, a single strategy, a single company: that is the discipline of success. Trying to fulfill multiple […]

External Growth — It’s Not Just Buying

My company Capstone is in the business of helping clients with external growth, and that usually means buying another company. But not always. It’s easy to miss a rich field of alternative opportunities if you just latch on to acquisition. Let me just focus on one of these: minority interest ownership. This surprisingly neglected tactic […]

Is It Growth You Need? Or Recalibration?

Common sense suggests that growth is simply about getting bigger — having more customers, more markets, more products and more revenues. In reality, a successful growth strategy should help you become increasingly focused and effective. Of course you want to increase your profits, but higher earnings don’t automatically flow from supersizing your company.  In fact, […]

A Follow-Up Question

  In my last post I was talking about perhaps the most fundamental strategic question: What business are you in?  This question actually goes beyond how you define your product or service. It extends to the kind of customers you are seeking. Here’s something I often ask clients who are looking to grow by acquisition: […]

Before You Buy, Ask Yourself This

  One of the most potent tools we use at Capstone to help our clients prepare for an acquisition is a set of seven strategic questions. They are so simple, so obvious, that you’d think them unnecessary to ask. Yet they are often skipped over in the rush to grow. Let me share with you […]

Acquisition Is A Journey — Do You Have A Map?

  The statistics are frightening. By most reckonings, 77% of company acquisitions fail. That failure rate has nothing to do with luck. It is the telltale statistic of widespread ignorance. Now when I say “ignorance” I don’t mean lack of expertise. That’s the paradox.    I often encounter clients who tell me, “Yes, we have […]

M&A 2009: A Book In The Works

  If you want to read a decent book on M&A, be prepared to spend $70 or $80, and set aside several days to plough through a heavy-duty tome for business students. There are exceptions, but for the average business reader there’s remarkably little to guide you through our world of deals.   So I’m […]

The growth ceiling

The Growth Ceiling And How To Break It

“Our strategic plan calls for us to double our size…” I hear it often. As a plan, it’s usually very successful in doubling the stress of frustrated executives. By massive efforts to improve products and smarten the marketing, they can get revenues from $100 million to $125 million. But $200 million? They pay lip service to […]

From “Doing Fine” To “Stepping Up”

The year is closing out and it’s budget season again, a time to look ahead to 2009. Despite the chilly economic climate, there are plenty of companies doing pretty nicely thank you. At Capstone we have a number of successful clients who have their current operations nailed down. Products are selling, customers are loyal and […]