When you acquire a company, the biggest risk you face in the unknown. You put a potentially large sum of money down for results that are not guaranteed. Whether you are acquiring a company for a new technological capability, to expand your geographic footprint, or for its complementary product line – there’s always the possibility […]

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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 […]

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Acquisitions are one of the fastest ways to grow, but they do come with their own set of risks. Industry numbers show that about 70% of acquisitions fail, so executives are highly motivated to mitigate their risks when purchasing a company. This can be done in a number of ways. Usually we think about hiring […]

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For the last couple of years, corporate America seems to have been playing it safe when it comes to growth. Currently U.S. corporations are holding on to a record $1.65 trillion in cash. Are you in a similar position, perhaps? Cash may not be your “security” blanket but you may be unwilling to take the risks […]

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In performing due diligence, I recommend you look not only for risks but also for opportunities. That’s how I approach due diligence for our Capstone clients.  As we examine the seller’s operations and books, we place every new discovery in one of three color-coded “buckets:” Red Bucket: Deal Changers. This is information that materially alters […]

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During due diligence, you may uncover deal-changing issues, or what I like to call “red bucket items.” Identifying these risks doesn’t necessarily mean you walk away from a deal, but you will need to negotiate new terms with the seller. Among the ways to protect yourself as the buyer when you find major issues: 1. […]

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As you go through the M&A process, you may find that advisors are both necessary and helpful to assist you. However, you must maintain your leadership role. I find that particularly toward the end of the acquisition process, executives imagine that they should hand the reins to a more “experienced” professional. This would be unwise. […]

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When you think about your company’s growth, ask yourself, “What is our risk tolerance?” The answer is key to formulating your strategy.  You cannot succeed with a plan for growth that pushes too far beyond the level of risk that is acceptable in your company. If you are the sole owner, the level of risk […]

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