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Mergers and Acquisitions

Fragmented markets with lots of small players lead to consolidation opportunties.

Reasons

  1. Can't raise finance
  2. Limited growth
  3. Acquired

Selling yourself is harder work, lots of preparation.

  • Establish commercial relationships.
  • Want buyer to take pricing risk
  • Need an internal champion in buyer

Getting bought

  • Command better price and terms.
  • King making potential, buyer goes to main competitor
  • Accelerated growth with less risk

Deciding

  • Psychology
  • Life situation
  • Age, appetite for risk
  • Prior experience
  • New challenge

Risk Adjusted Outcome

Risk tolerance and practicality of money.

Value * Probability = Expected Outcome

Highest expected outcome won't sell.

Need to find the most believable story to quanity expected outcome to provider value to stakeholders.

See DCF Analysis

Buy Side Profiles

  1. Strategic Buyer - Preferred
  2. Private Equity - Don't pay as much, disciplined
  3. Another Private Company - Equity hire, scale

Pre Merger

Due Diligence

Post Merger

  1. Culture fit: Team integration

Process overlap.

What routine checks and balances needs to be setup to manage this process optimally?

Thoughts

Questions

Obstacles

Opportunties

Decisions

Tools

What are best of breed tools that match jobs to be done?

Context

What are related concepts to master?

What useful education resources are available?