On Friday, August 21, 2009, Capstone will be hosting a webinar on maximizing the time and effort put into due diligence in the acquisition process. Due diligence has traditionally been seen as a “check the box”  exercise – you evaluate the strengths and weaknesses of a target, uncover liabilities and understand risk in order to […]

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In another installment of our video series, I discuss what “Synergy” really means.  Synergy is a word that gets bandied around a lot in the world of M&A.  When discussing potential deals, companies often try to justify a mediocre deal by talking about all of the synergies that will result.  Really, though there are only […]

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There was an excellent profile in last weekend’s Wall Street Journal of Cisco Systems and its CEO, John Chambers. Cisco is a company that “gets it”.  In some of the most difficult economic conditions of our lifetime, Cisco is not hiding its head in the sand.  Here is Chambers’ philosophy: Even in this downturn, we […]

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Back in December, I noted (and agreed with) one author’s proclamation that in the current economy, the balance of power in M&A has shifted from sellers to buyers.  The main reason:  With the credit market in a crunch, cash is king, and cash-rich companies hold a distinct advantage. As these survey results show, this trend […]

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At a seminar on the M&A process, I discuss the most common reason that acquisitions fail – and it might not be what you expect: Have you been part of a failed acquisition?  What do you think was the main reason that it didn’t work? Let me know in the comments!

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I wanted to post a quick note about the difference between the valuation of a company and the price that you pay to buy that company.  This distinction came up after a conversation I had the other day with an associate who had difficulty understanding why he was looking at paying a different amount for […]

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Recent news indicates that the federal government will “prop up” the major banks if they continue to falter.  This has some worried that these large financial institutions will be “nationalized”.  The government says that this is not the case: The strong presumption of the Capital Assistance Program is that the banks should remain in private […]

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This Friday, February 20, I will be holding a free webinar on “Finding the Right Markets for Growth” at 1:00 PM ET.   You can register by clicking here. In these tough economic times, market research and selection are vitally important to position yourself for growth now and in the future. Capstone Program Manager Gretchen Johnson […]

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Thorough market research has multiple benefits for the astute M&A operative. It sets you apart from other buyers by arming you with crucial information when approaching prospects.  It also constitutes one of the early steps in the due diligence that is part of any acquisition program. This is a vital consideration. The conventional concept of […]

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When you’re going after an acquisition, you need clear and compelling reasons— not just for your choice of target company but for your choice of market. The only way I know to do that right is to define your criteria in advance. Needless to say, your specific market criteria will be driven by the unique […]

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Before you look for a company to buy, you need to define the market where you will search your target. Why? The fact is that in almost every business situation, growth follows demand.  The reason you pick your market before you choose your prospects is to ensure there is a healthy, stable demand for your […]

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When you’re considering growth through acquisition, it may seem obvious to focus on companies that are actively searching for a buyer. In fact, this is the most common procedure, widely advocated by investment bankers. However, it is an approach that will severely limit your chances of finding the right company. For-sale companies are often “for […]

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You could assume that as an M&A expert I’m in the business of acquisitions. But I prefer to say that I’m in the business of external growth. Sometimes, growth is served by taking other routes than acquisition. One of those can be a simple strategic alliance, which can play a useful role in expanding opportunities […]

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When we begin work with M&A clients on their Growth Program Review we normally use Michael Porter’s model, the Five-Forces Analysis.  This shows the five key forces acting on a company’s destiny: Competitors, Customers, New Entrants, Substitutes and Suppliers. This model invites you to look at the pressures on your business from several key perspectives, […]

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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 […]

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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 […]

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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. […]

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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 […]

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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 […]

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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. […]

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