Acquisitions that Work

Acquisitions That Work
Preferred Business Brokers
Rand Hollon
What Works?
What Works?
Over 750,000 times a year
The Players
 Buyers
 Sellers
 Preferred Business Brokers
Large Amounts of Money
(maybe yours)
The Pieces
No Compete Agreements
Asset Sale vs. Stock Sale
Contract Provisions
Letters of Intent
Buyer’s Due Diligence
Purchase Price Allocation
Role of Attorneys and Accountants
Transition and Integration Roles
Etc., Etc., Etc.
The most important valuation formula you’ll
ever need:
CQ + PQ > IQ
The World Is Flat, Thomas L. Freidman
The Successful Acquisition
“All acquisitions are local.”
Deals from Hell, Robert F. Bruner
The Seller
A change in competition
A partnership break-up or stockholder change
Unexpected changes in finance (divorce/medical)
Ready to explore other business opportunities
Business has grown beyond seller’s ability to manage
Desire for a big payoff
Owner’s heirs don’t want company or are not competent to
run it
Owner wants to simplify his life
The Seller’s Goals
Get Top-Dollar
Have a Good Chemistry with the Buyer
Peace of mind
• Wants to leave his employees in good hands
• Wants to leave his customers in good hands
Buyer success
The Seller’s Strategy
Keep your foot on the gas – a well run business is
a valuable commodity in any market
Maintain confidentiality
The Strategic Buyer
The Strategic Buyer’s Goals
Increase Market Value
Strengthen Strategic Position
Add Organizational Strength
Improve Reputation
A Successful Acquisition
Increase Market Value
• Your business. Your Investment.
Strengthen Strategic Position
• Increase Market Share
• Improve Profitability
• Add a Service Offering
• Add a New Market Area
Add Organizational Strength
• Add Depth of Employee Talent
Improve Reputation
• With Employees, Customer Base or
Industry at Large
The Buyer’s Strategy
Maintain confidentiality
Have a transition and integration plan for the
target business
“Execution is the chariot of genius.”
- William Blake
CQ + PQ > IQ
“At the end of the day, it’s always an art, not a science”
- Dan Scheiman, Senior VP, Cisco Systems