Get ideas for how to deploy cash to further your credit union’s short-term and long-term growth in Capstone’s upcoming webinar with NCB. An approach that addresses both the day-to-day and on the long-term are critical to your success.

We are excited to following up on the success of last year’s webinar with a panel discussion “Got Cash? How Successful Organizations Accelerate Short and Long Term Growth” led by Bill Stewart of NCB and John Dearing of Capstone. Bill and John both have extensive experience helping credit unions grow and will speak about new ways for credit unions to generate more interest and noninterest income in order to thrive in today’s changing environment.

This webinar will cover:

  • Credit union industry outlook: Trends, challenges and opportunities
  • How to balance daily demands with future vision
  • Collaboration opportunities for credit union growth
  • Action steps and key takeaways
  • Q&A with panelists

Got Cash? How Successful Organizations Accelerate Short and Long Term Growth

Date: July 18, 2017

Time: 12:30 PM – 1:30 PM EDT

About Capstone

Capstone is an advisory firm focused on helping companies grow through proactive, strategic growth programs. We have helped numerous credit union and CUSO leaders develop, evaluate, and implement initiatives for growth. www.CapstoneStrategic.com.

About NCB

National Cooperative Bank provides comprehensive banking services to cooperatives and member-owned organizations. NCB was created to address the financial needs of an underserved market niche – people who join together cooperatively to meet personal, social or business needs. Given our shared cooperative roots, credit unions and NCB have had a mutually beneficial relationship since NCB’s inception. www.ncb.coop.

Photo Credit Hazma Butt via Flickr cc

Negotiating for an acquisition is quite a bit different than any other type of negotiation. Unlike a debate or argument, where your goal is to soundly best the opposite side no matter the cost, in acquisition, you must achieve your goal while maintaining a positive relationship with the opposite side. This is because you’ll likely be working alongside the opposite party once the deal closes.

Especially in the case of strategic, not-for-sale acquisitions, the buyer will often keep the owner on at least for another one to two years – maybe even longer – to continue growing the business. If both sides hate each other, it’s unlikely the deal will work out in the long-term. You don’t want to have a strained relationship with the seller who may be integral to the newly merged company’s success. So how do you get what you want without souring a relationship?

Pick Your Battles Wisely

One of the tricks is to realize that not every issue is created equally, and it’s not necessary to argue over every last detail. Before you begin negotiating, you should understand your desired outcome and establish which items are essential and which ones you are willing to be flexible on. This way you compromise on certain issues and save your battles for the nonnegotiable items.

An Open Dialogue

A policy of openness and honesty is always helpful for fostering a relationship. While you may be tempted to storm off to “send a message” when discussions get heated, this rarely furthers discussion and only helps to create a discontent situation. Instead, try asking questions when you don’t agree or understand the seller’s perspective.

Hard-nosed negotiation tactics rarely work well in not-for-sale acquisitions. We’re not suggesting that you compromise your position by any means, but it’s important to think about the big picture and pick your battles wisely. Experienced strategic acquirers know negotiations are about more than beating the seller into submission. After all, the goal of acquisition is not to “win” the negotiation, but to put together a successful deal.

Learn more about negotiation for M&A in our upcoming webinar “Successful Negotiation Tactics” on Thursday, June 8, 2017.

After completing this webinar, you will be able to:

  • Explain the steps in building a negotiation platform
  • Describe effective tactics for getting what you want in a deal while protecting the relationship with the prospect
  • Detail how and when to bring legal counsel to the negotiating table
  • Outline a strategy to stake out three important details of any acquisition: Terms, Timing and Talent
  • Develop methods for broaching the issue of price and avoiding negotiation in circles

Successful Negotiation Tactics

Date: Thursday, June 8, 2017

Time: 1:00 PM – 2:00 PM EST

CPE credit is available.

Photo Credit: U.S. Department of Agriculture via Flickr, Public Domain, Modified by Capstone

 

Due diligence is more than just hammering away at a company to find out everything that might be wrong with it. It is about taking a focused approach throughout the acquisition process to uncover key points that will help you methodically evaluate a company to make sure it is the right fit.

Traditionally, due diligence takes place fairly late in the acquisition process, and is focused on rooting out the weaknesses of the target company. You are looking to uncover liabilities and understand the risk that comes with them. This kind of cautionary analysis is certainly an important milestone, and it can allow you to renegotiate the terms of the deal based on your findings. Due diligence in the traditional sense has also been a way to give yourself cover if problems that may arise later.

However, due diligence at its best means far more than just ferreting out hidden liabilities. If you follow recent thinking in M&A, due diligence is equally important as a tool to uncover concealed opportunities.  When you adopt this new perspective, you won’t be waiting until late in the acquisition process: you’ll be conducting due diligence right from the start. This new approach will help ensure thorough due diligence is conducted in order to maximize the success of your acquisition.

Learn more in our webinar A New Thinking on Due Diligence.

After this webinar you will be able to:

  • Describe how to organize due diligence to maximize efficiency and get the information you need to move the deal forward
  • Define what items to look for by key functional areas (sales, marketing, HR, IT, etc.), including financial due diligence
  • Explain how items uncovered during due diligence can affect deal structure and terms
  • Utilize tools to organize due diligence findings

A New Thinking on Due Diligence

Date: Tuesday, May 16, 2017

Time: 1:00 PM – 2:00 PM EST

CPE credit is available.

Photo Credit: Justin Baeder via Flickr cc

Does this sound familiar? You want to grow through acquisitions, but there are no good companies to acquire. While it may seem like there are absolutely zero acquisition prospects, usually that is not the case.

Many companies struggle to find acquisition prospects because they are focusing on only on industry partners, suppliers, or competitors they already have a relationship with. We call these companies the “usual suspects.” There’s nothing wrong with looking at the “usual suspects” for acquisition opportunities, but if you find you are hearing the same company names over and over again without getting any results, it may be time to try a new approach.

Here are four more ways to find quality acquisition prospects in addition the “usual suspects”:

  1. Market Research – In researching the market you will naturally uncover a few potential acquisition prospects. You will also have the advantage of gaining a deeper understanding of the market which will help you select the best companies to acquire, evaluate potential acquisition candidates, and negotiate with owners.
  2. Trade Shows / Associations – Both are an excellent source for finding many companies in your desired industry in a short amount of time. Walk the floor of a trade show and you’ll see dozens of companies all in one location and many trade associations also member companies listed on their website.
  3. Internal Input – Use the resources you already have. Your sales team is filled with folks who have their ear to the ground and are up-to-date on key players and new developments in the industry.
  4. For-sale Companies – Looking at for-sale companies is never a bad place to start your search. Just make sure you don’t limit yourself by only considering these opportunities. Including not-for-sale companies in your search will increase your chances for a successful acquisition. Remember, every company is for sale, for the right equation.

For more tips on finding companies to acquire join our webinar Building a Robust Pipeline of Acquisition Prospects on March 23.

After this webinar you will be able to:

  • Approach the search for the right acquisition prospect systematically
  • Understand effective research methods for identifying prospects
  • Develop criteria for your ideal acquisition prospect
  • Use tools for objective decision-making during the acquisition process

Building a Robust Pipeline of Acquisition Prospects

Date: Thursday, March 23, 2017

Time: 1:00 PM – 2:00 PM EST

CPE credit is available.

Photo Credit: patchattack via Flickr cc

Finding a list of companies to acquire is exciting! You start thinking about all the possibilities and how the deal will grow your business exponentially. But before you move forward with any of these candidates, take a step back and make sure you are looking at companies in the right markets.

What are the “right markets?” Markets that have a healthy, stable demand and are growing. After all the primary driver for acquisitions is to help your company grow. Without researching markets first, you risk acquiring a company in a stagnant or declining market. Although the company may have strong financials today, if there’s no demand in the marketplace, your acquisition won’t deliver the expected returns on growth in the future. Without first selecting a market, you have reason to beware of even the most tempting buying opportunities.

Finding the right market begins by defining the market using geography, verticals or another relevant factor, and by developing market criteria to aid in your decision-making. Your research will begin with a broad sweep and become progressively narrower as you learn more about the market.  Your market criteria will help you objectively evaluate and compare the markets against your strategic rationale for acquisition.

Researching markets first not only helps you avoid acquiring a bad company, it helps you identify the best companies to buy. By conducting market research, you will gain a better understanding of the market, which will help you evaluate acquisition prospects and negotiate with owners as you proceed with the acquisition process.

Learn more about the “markets first” approach in our upcoming webinar How to Pick Top-Notch Markets.

After this webinar you will be able to:

  • Understand the market-driven process
  • Explain market criteria (market growth and size, competitive dynamics, barriers to entry) and how to use them to evaluate a market or segment
  • Describe effective secondary & primary market research techniques
  • Explain the triangulation technique to obtain the most relevant information for accurate decision-making
  • Develop tools to objectively compare and contrast markets

How to Pick Top-Notch Markets

Date: Thursday, February 23, 2017

Time: 1:00 PM – 2:00 PM EST

CPE credit is available,

Photo Credit: Paul Benson via Flickr cc

Happy New Year! We are excited to announce the 2017 webinar schedule and invite you to join us this year for these exciting events.

For over 20 years we have helped companies grow and educated business leaders on strategic growth through mergers and acquisitions. Each webinar is led by a seasoned M&A professional providing practical tools and tactics to accelerate your company’s growth. You can watch individual webinars or attend the entire program to earn the M&A U™ webinar certificate.

2017 Webinar Schedule

* Topics and dates subject to change
Photo Credit: Barn Images

When you think growing your business in 2017, you probably picture hiring more sales people, opening a new branch, developing additional products or acquiring state-of-the-art technology. Today I want to introduce a new concept for consideration: growing by exiting a business. Before you immediately dismiss the idea, take a moment to challenge your assumptions about company growth and allow yourself to be open to a new perspective. The reality is in some cases exiting may be the best path for growing your company.

Here are three ways exiting can help you grow.

  1. Get Focused – By exiting non-core business lines you can be focus on what you’re really good at. Take P&G for example. Over the last few years the company has adopted a strategic focus and shed over 105 brands in order to focus on 10 fast-growing categories. Shedding these non-core business lines will help P&G become more profitable. You may have some business lines you want to divest so that you can refocus your strategy and resources on what you truly excel at.
  2. Avoid Losses – If a part of your business is no longer profitable, you should evaluate whether or not you should keep going. Maintaining a business simply because you’ve always done so is not a good reason. The world changes and it may be that your customers no longer have a need for this product. For example, it would be crazy to continue manufacturing VCRs in today’s world.
  3. Grow Your Bottom Line – While overall sales or number of customers may shrink if you exit a market, your overall profit may grow. We once worked with an American manufacturer who made millions of die-casting products for various industrial customers. Unfortunately, many of their customers were purchasing cheaper products from China. Faced with this competition, our client decided to reinvent themselves into a maker of specialty components for the aerospace industry. They sold their old equipment and purchased the latest technology. As a result, their customer base shrunk tremendously, but profit rose.

When we hear the word “growth,” we automatically think about “more,” “bigger,” “expanding” not “less,” “smaller” or “shrinking.” While many would never consider exiting a business in order to grow, I encourage you to consider it as you develop your strategic growth plan.

Learn more about growing your business in our webinar 5 Options for Growth.

Photo credit: Maxime Guilbot via Flickr cc

Are you thinking about growing your business? In any business endeavor, having the right questions is often half the battle.

Join us for a new webinar on “7 Strategic Questions to Ask Before Pursuing Mergers & Acquisitions” on Wednesday, December 7. We will cover 7 powerful questions that have been tried and tested with dozens of clients at the outset of their growth programs:

  1. What business are we in?
  2. What is our core competency?
  3. What are we not?
  4. Where is our pain?
  5. What are our dreams?
  6. What is our risk tolerance?
  7. What is our company DNA?

Explore each question in depth and learn how they have immediate applications and a direct impact on your growth strategy.

After attending you will be able to:

  • Establish a firm foundation for pursuing strategic M&A and external growth
  • Use tools to examine your current business situation
  • Begin to develop an action plan for growth

Date: Wednesday, December 7, 2016

Time: 1:00 PM EST – 2:00 PM EST

CPE credit is available.

Photo credit: Ryan Milani via Flickr cc

In order to finalize and close the deal, there are a number of issues to consider including drafting a Letter of Intent, determining deal structure, and papering the acquisition agreement.

Learn how to navigate through the legal technicalities of mergers and acquisitions in our upcoming webinar Contemporary Legal Issues in M&A led by M&A attorney John McDonald. John is a partner at Troutman Sanders and his strategic M&A practice involves representing publicly-traded and privately-held buyers and sellers in M&A transactions across a broad range of industries, both domestic and cross-border. John received his JD in Law from Georgetown.

Key Topics:

  • Define a typical timeline for the M&A process
  • Describe the key principles and purpose of a Letter of Intent and Term Sheet
  • Define the key differences between a stock purchase, asset purchase and merger
  • Explain the basic contents of typical sections of an acquisition agreement, including Sale and Purchase, Reps and Warranties, Indemnification, Closing and Post-Closing

Date: Thursday, October 13, 2016
Time: 1:00 PM – 2:30 PM ET
CPE Credit available.

Upcoming Capstone Webinars

M&A U Webinar

  • M&A: From LOI to Close
  • Brand Integration: An Acquisition Challenge
  • Five Options for Growth
  • How to Pick Top-Notch Markets
  • Building a Robust Pipeline
  • “The First Date”: Contacting Owners and Successful First Meetings
  • A New Look at Due Diligence
  • Successful Negotiation Tactics
  • Tax Considerations in M&A
  • Mastering Valuation for M&A

View the complete series and register for the M&A U™ Webinar Certificate.

Photo Credit Francois schnell via Flickr cc

Valuation, establishing the financial worth of a company, is an important step of the acquisition process. People often get excited about valuation and start crunching numbers in order to reach the best deal. However, before you become too focused on the financials, remember that valuation and price are not the same. I have seen many executives spend weeks pouring over Excel spreadsheets only to arrive at precisely the wrong number.

Valuation vs. Price

Valuation is the financial assessment of a business that is calculated using an accepted methodology. Valuation can be used for many purposes including strategic management planning, gift and estate tax compliance, accounting, and M&A. In an acquisition, valuation gives you a sense for what you should pay for the prospect company.

Price, on the other hand, is negotiated in the acquisition agreement and may not be the same number at all. A number of different issues, including deal structure and other non-financial aspects, may affect the dollar value you pay for the company. If you are a strategic acquirer, you may even be willing to pay more for a company in order to swiftly execute your strategic growth plan or to block a competitor from purchasing it.

Using Valuation in Acquisitions

Valuation is both an art and a science because there are many ways to calculate a company’s value. Calculating the value of a company is much more than just plugging numbers into an equation. You must obtain the relevant financial information, apply the appropriate techniques and develop the correct estimates.

The three most common methodologies are the asset approach, the income approach and the market approach. Using each method you will arrive at a different number. In addition, when calculating the value of a company for strategic acquisitions, you are attempting to value future performance, which is only an estimate at best. Determining the appropriate valuation methodology and assumptions to use requires experience.

Join us for a webinar on Mastering Valuation for M&A with Valuation Advisor Todd Nelson. Todd is an Accredited Senior Appraiser (ASA) and Certified Valuation Advisor with more than 18 years’ experience in complex valuation matters including strategic mergers and acquisitions.

Key topics:

  • Basic theory of business valuation
  • How to gather useful data on the economy, industry and specific businesses to assist in valuation accuracy
  • Basic business valuation fundamentals and techniques
  • Appropriate methodologies for your valuation purpose
  • Developing equity and invested capital discount rates
  • Understanding the sources of variables used in the development of a discount rate
  • Common adjustments for constructing normalized income statements

Date: Wednesday, September 21, 2016
Time: 1:00 PM ET – 2:30 PM ET
CPE credit available.

Photo Credit: Horia Varlan via Flickr cc

Remember that just because a deal is announced, it doesn’t mean it will go through. A record number of M&A transactions announced in 2015 have been cancelled bringing the total deal value down from $4.374 trillion to $78 billion. Unfortunately cancelled deals mean a lot of time, resources and effort were wasted putting together these transactions.

Why Do Deal Fall Apart?

Typically when you first read about a deal in the news, especially with large publicly traded transactions, the transaction has not been completed and the two companies have only agreed to a letter of intent (LOI). After signing the LOI, the two companies can iron out all the details of the final agreement and wait for regulatory approval if necessary. During this period between LOI and close, the deal may break up for a number of reasons.

1. Regulatory Hurdles

Anti-trust issues and regulatory hurdles create delays for many large, publicly traded transactions. Regulatory scrutiny doesn’t necessarily mean a transaction will be called off, but it can be a contributing factor. Pfizer planned to acquire Allergan for $160 billion and relocate its headquarters to Ireland in order to lower its tax bill. However, due to new U.S. Treasury rules aimed at curbing these types of transactions, called tax inversions, Pfizer and Allergan called off the deal earlier this year.

2. Disagreement over Deal Terms

Other acquisitions fall apart because the two companies can’t agree on deal terms. The massive $35 billion “merger of equals” between Publicis Groupe and Omnicom Group faced a number of challenges: personality clashes, cultural differences, and disagreement on deal structure and senior positions. The deal was expected to close in six months when it was first announced, but nine months later the two companies mutually agreed to disagree and went their separate ways.

3. Cold Feet

In the world of privately-held not-for-sale acquisitions, it’s not uncommon for an owner to be anxious about selling their business. Typically by the time you’ve signed an LOI, you have overcome many of these fears by ensuring that the acquisition is the right strategic fit and gaining an understanding the owner’s perspective and motivations. However, the owner could still change their mind and decide not to sell.

On the other hand, circumstances could change that make you back out of the deal. Something uncovered during due diligence or a surprising turn of events may prevent you from going through with the deal. We once had to walk away from a deal because we didn’t share the same ethical values as the prospect company; the owner had two sets of books.

In my next post I’ll go over strategies for moving your deal forward after signing the LOI.

One of the primary reasons acquisitions fail is because of integration challenges post-closing. Implementing your integration plan smoothly and effectively is key to realizing the synergies of your acquisition. In a KPMG survey, U.S. executives cited a well-executed integration plan as the top factor that leads to deal success.

Integration is a massive undertaking that you should begin planning long before the deal closes. There are many moving pieces to consider from combining IT systems and product lines to overcoming cultural differences to branding of the new company. In addition, you must clearly communicate with your employees and customers. If you are just beginning to think about integration when the acquisition closes, you are already too late.

Looking back on their past acquisitions, 80% of executives surveyed by EY would have sped up the integration process and 58% said they would have communicated their integration plan more clearly. Failing to focus on integration can be a costly mistake that can undo months or years of work. Don’t let that happen to you: plan for integration now.

Learn how to build and execute a successful integration plan in our upcoming webinar,Keys to Integration Success” on August 11.

In this webinar you will be able to:

  • Explain the different levels of integration in order to decide how much to integrate after the deal is done
  • Begin to develop a 100-Day Post-Closing Plan
  • Explain effective communication strategies for integration success
  • Define cultural differences in organizations and how to bridge them
  • Utilize secondment to your advantage

Date: Thursday, August 11, 2016
Time: 1:00 PM ET – 2:00 PM ET

Photo credit: Willi Heidelbach via Flickr cc

Did you know that for tax purposes, all deals are viewed as stock purchases or asset purchases, regardless how they are structured for corporate reasons? The structure of a deal – stock or asset – will have an impact on both buyer and seller. Understanding the tax implications of your deal is important because it may impact how you negotiate and your preferred deal structure. For example, as a buyer, you may need to pay a little bit more for the seller to agree to an asset sale.

There are many other tax considerations to think about so its is helpful to have a tax advisor who specializes in M&A involved early on in the process to ensure you are not overlooking any important issues. It can be beneficial to have a tax professional on board prior to drafting and signing the Letter of Intent. This way, your tax advisor can help you determine your preferred deal structure so that you can include this detail in the LOI, which will help you during negotiations down the road.

Learn more about Tax Considerations in Mergers and Acquisitions in our upcoming webinar presented by Tax Attorney Alexander Lee on July 21.

Date: July 21, 2016

Time: 1:00 – 2:00 PM ET

Negotiating during an acquisition can be tricky at times. How firm should you be? What does the other side really want? How can you get the seller on board? It can be tempting to hand it over to the experts when you reach this point, but this would be a mistake.

During negotiations, your primary goal is to reach an alignment with the seller on the strategy and rationale of the deal. This is another chance for you to continue developing your relationship with the owner. While it’s important to seek council from advisors, lawyers, and other experts, you are the one who will have to lead the newly merged company once the deal is done. As the decision-maker it’s your deal and you should maintain your leadership and stay actively involved. Don’t hand the acquisition over to an “expert” and walk away.

Learn how to lead negotiations for M&A in our upcoming webinar “Successful Negotiation Tactics.” In the webinar we will cover how to build your negotiation platform and how to protect your relationship with the owner while still getting what you want.

Date: June 16, 2016

Time: 1:00 – 2:00 PM ET

Photo Credit: Chris via Flickr cc

We all know growth is vital to the success of our organizations, but knowing exactly how to achieve growth can be challenging. Credit unions today face many issues such as regulatory challenges, industry consolidation, economic and political uncertainty, and tough competition. In such an environment how can you continue to provide value to your members?

Fortunately, there are many options for growth for credit unions to consider including investing in CUSOs, using CUSOs to grow through mergers and acquisitions, proactively seeking ways to generate non-interest income, external partnerships and collaborations, and more!

Credit unions that succeed long-term take a proactive approach to seizing these opportunities for growth. Learn how to swiftly implement your growth strategy and position your organization for success in the upcoming webinar “Finding the Best Path for Growth: Strategies for Credit Unions” presented by Capstone Managing Director, John Dearing, and hosted by National Cooperative Bank.

Webinar topics include:

  • New ideas for strategic growth
  • How to evaluate and prioritize your options for growth
  • New ways to generate non-interest income
  • How to use collaborations, partnership and strategic acquisitions as a growth strategy
  • Exploring CUSO investment opportunities
  • Developing strategic criteria
  • Tools for exploration and execution of a strategic growth plan for your credit union

Date: Thursday, June 23, 2016

Time: 12:00 PM – 1:00 PM ET

About Your Presenter

John Dearing is a Managing Director at Capstone, an advisory firm focused on helping companies grow through proactive, strategic growth programs. We have helped numerous credit union and CUSO leaders develop, evaluate, and implement initiatives for growth.

About National Cooperative Bank

National Cooperative Bank (NCB) provides comprehensive banking services to cooperatives and member-owned organizations. NCB was created to address the financial needs of an underserved market niche – people who join together cooperatively to meet personal, social or business needs. Given our shared cooperative roots, credit unions and NCB have had a mutually beneficial relationship since NCB’s inception.

Photo Credit: Barn Images

Due diligence is an important step in the acquisition process that comes prior to closing a deal. Most people think about due diligence from a risk assessment standpoint or as a checklist of items that must be completed in order to move the deal forward.

Traditional reasons for undertaking due diligence include evaluating strengths and weaknesses of the seller’s organization, uncovering liabilities, and understanding risk. Ultimately the findings in due diligence are used to determine whether to proceed with the acquisition. Often, if liabilities are uncovered, buyers will try to renegotiate terms and get a lower price based on the findings.

While these traditional reasons for due diligence are useful and accurate, they can be too restrictive. By only focusing on the negatives in the organization you limit your thinking. Here are four ways to broaden your perspective and maximize the effectiveness of due diligence.

  1. Focus on opportunities – Instead of concentrating only on risks, think about how you create more value in the organization. For example, the seller may have a high cost for raw materials. Under the traditional approach to due diligence, you would flag this finding as a negative. However, this could be an opportunity for you to improve the company’s cash flow. As the buyer, you may be able to reduce cost of raw materials because you have a better purchase price due to the high volumes you are already buying.
  2. Plan for integration – Due diligence should not be used only to renegotiate terms or beat people up on price; it is really a tremendous opportunity to focus on integration and integration planning. Rather than focusing on yesterday, use it as an opportunity to guide your planning for the future.
  3. Identify star employees – We often ask the owner to identify key staff at their organization, but during due diligence you have a chance to do this for yourself. These star employees could contribute to the success of your organization for years to come.
  4. Craft a creative deal structure – If during due diligence, you find some problems with the organization, you don’t have to completely abandon the deal. Using a creative deal structure may allow you to get the deal done while isolating the liabilities. Instead of thinking about the deal as a binary decision of either 100% acquisition or nothing, consider how you can structure the deal for success. Perhaps a carve-out or minority interest would work in your situation.

Learn more in our upcoming webinar “A New Thinking on Due Diligence” on Thursday, May 26 at 1:00 PM ET.

A New Look at Due Diligence

Date: Thursday, May 25, 2016

Time: 1:00 PM EDT

Think about the last time that you met somebody for the first time: a coworker, a friend, a romantic interest, or even a new barista at the coffee shop.

When you first met this person, whether you consciously thought about it or not, you formed an impression of them, even though you didn’t really know them. Depending on your interaction, you may have found them kind, exciting, rude, or boring. On the other side, they also formed an opinion of you.

Once formed, a negative opinion can be very difficult to change. You only have one chance to meet someone for the first time. We can’t go back and change the past if the meeting goes poorly. That’s why we try hard to make a good first impression in a job interview or on a first date.

In acquisitions, by the time you make contact or meet with an owner, you have already dedicated significant time and resources formulating your strategy, researching markets, and identifying quality acquisition prospects. You don’t want all your efforts to go to waste because of a silly mistake.

With owners of not-for-sale companies, making a good impression is essential. It’s the first step in building a relationship that could lead to a successful deal. It’s important not to forget the human aspect during this critical first meeting.

Tips for Making a Good Impression

Here are some tips for making a good first impression when meeting the owner of a potential acquisition:

  1. Be knowledgeable – Do your research before contacting the owner so you are educated on their specific industry and company. An owner will form a better impression of someone who has invested time in understanding their business. It shows that you take acquisition seriously.
  2. Customize your materials – If you’re sharing any kind of documentation or presentation, be sure to reference the target company and add details specific to their business. This will communicate that you have particular interest in them, and they are not just one prospect on a list.
  3. Demonstrate strategic value – Why should anyone sell their company to you? Make sure you have a compelling answer in terms of a long-term strategy that shows growth for both their entity and yours.
  4. Establish trust – Understandably the owner may be wary in your first interactions, but establishing trust early on is incredibly important. By following the tips above, you’ll be on your way to developing a positive relationship with the owner.

Make a good first impression in your next owner meeting. Join our upcoming webinar on April 21 to learn best practices on approaching owners.

“The First Date”: Contacting Owners and Successful First Meetings

Date: Thursday, April 21, 2016

Time: 1:00 PM EDT

 

Photo Credit: Franklin Heijnen via Flickr cc

Finding the right partner is a crucial component of successful mergers and acquisitions and pursuing a deal with the wrong company can be a costly mistake. We’ve all seen the headlines of major mergers and acquisitions that have fallen apart at some point along the deal – whether it’s before the transaction closes or during integration. On the other hand, if done right, with the correct partner, strategic M&A allows a business to grow rapidly and effectively and gain a competitive advantage.

When searching for companies to acquire, it is important to keep three things in mind: Strategy, demand, and options.

Strategy First

Any successful M&A process must begin with a solid, strategic rationale. Why do you want to make an acquisition? What will the acquisition accomplish? How is M&A aligned with your overall growth strategy?

It makes no sense to pursue M&A simply for the sake of it with no real plan in mind. That is like starting out on a trip without a map (or GPS or smartphone) and hoping you will arrive at the correct destination. Make sure you have a plan and strategy.

Be Demand-driven

Once you have developed your strategy, you should determine the right market to focus before you being looking at individual companies. This “markets-first” approach allows you select markets that have a healthy, stable demand for your acquisition partner’s products or services. Without taking future demand into consideration, you risk acquiring a company in a shrinking market where demand for its products and services are in decline. Avoid pursuing these unqualified acquisition prospects by selecting the best markets for growth before researching acquisition prospects.

Have Many Options

While you may only be acquiring one company, it’s not enough to only pursue one acquisition prospect at a time. You do not want to spend all your time and effort pursuing one company only to risk having the deal fall apart in the end. Deals fall apart for a number of reasons – the owner get cold feet, you can’t agree on the deal terms, a competitor comes along, etc. If you have only looked at one company you will find yourself back at square one with nothing to show for all your time and effort spent chasing the deal.

In fact, it takes up to 75 to 100 candidates to identify the right deal. It’s not enough to have a plan B, you need a plan C, D, E, F, and so on. We encourage you to broaden your search for prospects to include not-for-sale companies. Not-for-sale simply means the owner is not actively considering sell – not that they will never sell the company. By including not-for-sale companies in your search you significantly expand your universe of potential acquisition prospects.

Think of your prospect pipeline as a funnel. Gradually, as you move forward in the M&A process, you will eliminate candidates that are not an ideal fit with you strategic rationale for acquisition. With the “funnel” approach you can move prospects along simultaneously, in a systematic and efficient manner.

Learn more about Building a Robust Pipeline of Acquisition Prospects in our webinar on March 17.

Date: Thursday, March 17
Time: 1:00 PM ET
CPE credit available.

Photo Credit: Barn Images

The new year is off to a rocky start. The stock market’s performance so far in 2016 is fueling worries about the economy; globally stocks have slumped, oil prices continue to drop, and investors fear a new financial crisis. While it may be tempting to panic, a challenging market also presents a unique opportunity for strategic leaders.  In today’s environment, M&A can be a powerful tool to spur growth and tackle new obstacles.

The secret to successful growth is to adopt a demand-driven philosophy toward M&A, focusing on markets that have a high potential for future growth. Rather than generating a list of acquisition targets, some of which may be in declining markets, adopt a “markets-first” approach. Investigate which markets – geographic or vertical – will perform well for years to come. Begin your search broadly, then conduct research on specific market segments. This will help you develop a pipeline of relevant acquisition candidates.

Learn more about this markets-first, demand-driven approach to M&A in our Feb. 18 webinar:How to Pick Top-Notch Markets.”  CPE credit is available.

This webinar will equip you to:

  • Understand the market-driven process
  • Identify market criteria (such as market growth, competitive dynamics, barriers to entry, etc.) and use them to evaluate a market or segment
  • Describe effective secondary and primary market research techniques
  • Use the “triangulation technique” to obtain the most relevant information for accurate decision-making
  • Develop tools to objectively compare and contrast markets.

How to Pick Top-Notch Markets Webinar

    • Date: February 18
    • Time: 1:00 PM ET

About Capstone Webinars

Learn M&A Uabout strategic growth through M&A in Capstone’s monthly webinar series. In each live webinar, a seasoned M&A expert provides practical tools and tactics to accelerate your company’s growth. Continuing Professional Education credits are available. Attend all twelve Capstone Webinars and earn the M&A U™ Webinar Certificate to display your commitment to this important field in your business education. Click here to learn more.

Photo credit: Barn Images

We are excited to share our expertise on strategic growth through M&A with our new M&A U™ Webinar certificate.

M&A U

The M&A U™ Webinar certificate will be awarded to those who attend all 12 monthly Capstone Webinars live. Each live webinar features a seasoned M&A expert sharing practical tools and tactics to accelerate your company’s growth. CPE credits are available.

We hope these webinars are a valuable resource for you as you continue exploring strategic growth through mergers and acquisitions.

  • Subscribe to an entire year of webinars
  • 12 webinars led by experts in M&A, Valuation and Tax
  • Receive a 15% discount
  • Earn up to 12.5 CPE credits
  • Become M&A U™ Webinar certified
  • Access webinar recordings on-demand

2016 Capstone Webinar Schedule

  • Five Options for Growth – January 21
  • How to Pick Top-Notch Markets – February 18
  • Building a Robust Pipeline – March 17
  • The First Date: Contacting Owners & Successful First Meetings – April 21
  • A New Look at Due Diligence – May 26
  • Successful Negotiation Tactics – June 16
  • Mastering Valuation for M&A – July 21
  • Keys to Integration Success – August 18
  • Tax Considerations in M&A – September 15
  • Contemporary Legal Issues in M&A – October 20
  • M&A: From LOI to Close – November 17
  • Brand Integration: An Acquisition Challenge – December 15

Photo credit: Barn Images