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Write You - Acquisition Binge can Cause Indigestion
Sellers have historically viewed earn outs with suspicion as a way for buyers to get control of their companies cheaply. Earn outs are a variable pricing mechanism designed to tie final sale price to future performance of the acquired entity and are tied to measurable economic milestones such as revenues, gross profit, net income and EBITDA. An intelligently structured earn out not only can facilitate the closing of a deal, but can be a win for both buyer and seller. Below are ten reasons earn outs should be considered as part of your se
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good par
There is a different kind of company experience lurking in corporate America that awaits the unsuspecting candidate who is hoping to find a stable and beneficial work environment. With the advent of today’s large corporation environment, there are many smaller companies caught up in the practice of being purchased and absorbed by big companies that are looking to stifle competition or increase their own market share by acquiring successful small business operations.Often, when these small to middle sized companies are absorbed by th
While fast growth through acquisition is a thrilling experience in running businesses, it also holds much more risks than meets the eye. When the company is in trouble, some CEOs also go on a shopping spree – acquisition. It is more glamorous and exciting than trying to fix mundane turnaround issues back in the office. It takes shareholders’ attention away from the domestic problems and impressed them with expansionary programs. Rapid acquisition done in haste with inadequate homework, wrong timing, egoistic reasons and impatience for success can result in calamity.
Harvard don, Michael Porter studied the success rate of 33 highly regarded companies over a 36-year period of acquisition. His data revealed that over half of the ‘unrelated’ acquisitions were later divested. Research by McKinsey & Company found a failure rate of 61% in acquisition programmes, with failure defined as not earning a sufficient return on the funds invested. Sometimes these failures are due to the fact that the acquisition was a mismatch in the first place, with small odds for success.
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good part
Small Dogs Press is a new publishing house. In addition to selling their first title, "She's the Girl," Small Dogs wants to create awareness of their brand. Here's what publisher Susan Sabo has to say about some creative (and inexpensive) ways to do so:"I've spent as much time and effort on brand marketing for Small Dogs Press as I have for my individual title that's about to come out. Totes are good, hats, sweatshirts, bumper stickers . . . the possibilities are all over the place.""I made up bumper stickers for company brand
Harvard don, Michael Porter studied the success rate of 33 highly regarded companies over a 36-year period of acquisition. His data revealed that over half of the ‘unrelated’ acquisitions were later divested. Research by McKinsey & Company found a failure rate of 61% in acquisition programmes, with failure defined as not earning a sufficient return on the funds invested. Sometimes these failures are due to the fact that the acquisition was a mismatch in the first place, with small odds for success.
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good par
The field of investigative reporting involves bringing to the fore facts and figure that affect human interests and fair governance. This means conducting in depth research, looking at public records, doing extensive interviews, as well as checking and rechecking of facts before publication. Whether print or television, investigative reporting is essentially “watchdog” reporting. This means reporting crimes, unfair practices, injustice, as well as other human interest aspects like environment, disease, and so on.Investigative journal
Harvard don, Michael Porter studied the success rate of 33 highly regarded companies over a 36-year period of acquisition. His data revealed that over half of the ‘unrelated’ acquisitions were later divested. Research by McKinsey & Company found a failure rate of 61% in acquisition programmes, with failure defined as not earning a sufficient return on the funds invested. Sometimes these failures are due to the fact that the acquisition was a mismatch in the first place, with small odds for success.
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good par
The paperless office is a concept that has captured the imagination of many professionals who's desks are covered in clutter. Some years ago, the idea of the paperless office was popularized as an ideal in need of attaining. The concept is one of the newer, less understood methods of drastically increasing office efficiency and reducing costs.Basically, the term "paperless office" describes the process of transferring records from paper to computer. Sometimes the paperless office is referred to simply as "document imaging". Often
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good par
It's an issue faced by business owners worldwide -- having to let go of, or "fire" a client. When I started my business, it's not a situation I ever thought I would face, as I was happy to take on almost anyone that wanted to hire me. However, over time, my client scrutinizing skills became more acute, and I began to realize that not every client is a perfect client for me. In fact, more than 50% of the people I speak with are not a good fit for one reason or another. Just like Donald Trump in "The Apprentice", sometimes you just have t
A high percentage of merger difficulties and failures are the result of defective management. Target companies are strategically sought and stalked, but then the follow-up acts are poorly orchestrated. Often people in both firms will be seriously troubled about how the acquisition may affect their personal careers. A good part of the merger/acquisition planning should be aimed at deciding how these concerns will be addressed. For instance, Novell’s merger with WordPerfect caused people in both organizations to experience dismay and the combined company teetered subsequently on the brink of disaster.
After buying WordPerfect for US$855 million, Novell sold it to Corel less than two years later for only US$115 million. Media companies faced similar problems of acquisition binge. The conventional wisdom in the industry that spur such manoeuvre was to grow the business by acquisition. Sony Corporation (Japan) was a case in point of being one of the first to venture aggressively into music and films. The same course of action was adopted by Vivendi Universal (French), Bertelsmann (German) and AOL Time Warner (US). It was believed that a product could be developed, then marketed through a wide range of in-house channels, from compact disks, DVDs, Web sites and even theme parks. This led to a proliferation of businesses requiring different skills and expertise, resulting in the failures of these acquisition ventures.
In their haste to capitalize on the boom years, many companies reckoned that the fastest way to beat the competition was to join in. After all, if you cannot beat it, join it. Thus goes the
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