Jealous best man steals the bride
Us, M&A advisors make the most money, when we are hired for all 3 major parts of the job: (1) Dress up the bride, (2) Find and bring the groom, and (3) Negotiate the prenup. True, not all sell mandates end up successful and some take too long to be profitable. So, having much to [...]
Brave buyers benefit
It is one of Warren Buffett’s favourite tenets, that when it comes to investment, the majority is always wrong. The best time to buy companies is when uncertainty is highest, not when everyone else is acquiring for dear. The time to acquire is when buyers are fearful and owners are forced to sell by shortage [...]
Hedge HUF-risk with M&A
The Hungarian forint has fluctuated widely since last summer. From its 18 July peak of 228 HUF to the euro, it weakened to 316 on 6 March, than recovered slowly to 265. Up 39% and than down 17%. This volatility benefited forex brokers and bank treasuries, but was bad for everyone else. Exports suffered when [...]
Financial drug-pushers
My credit card company – a major but currently ailing US bank – has unilaterally increased the limit of my credit card. On calling them, they told me that they would only reduce it if I submitted myself to a painful procedure through their call centre bureaucracy. Essentially, they tried to push me into taking [...]
Sell blueprints, not companies
I believe that there is only 2 ways to sell a company for market price, defined, as the „highest possible price that would be worth paying by the most synergistic bidder”. The first is to run a successful auction. This however, requires that the company would be suitable for a wide range of bidders. The [...]
Leverage with earn-out
2007’s financial crisis reduced, and last year’s recession all but eliminated leveraged buy-outs. There are still some high-debt deals around. But for the most part, involving “legacy-leverage”, the servicing of which may actually be triggering the transaction. Since the availability of financing is the main condition of M&A transactions, alternative means of it are reviving. [...]
Double price for half effort
The single most critical element of an M&A transaction is the speed of execution. Companies are living organisms that dynamically change. Consequently their value fluctuates depending on the market for its products, new innovations, marketing moves of competitors, exchange rates or its financing environment. The same may be true for the buyer, and if it [...]
Changing of the guard
The M&A industry may have been the first to be hit by last year’s financial crises. Lehman’s collapse practically seized M&A activity for 6 months. The deals that closed were kept on track only by inertia, or the fear that pulling them would harm more than completing. Hardly any new deals were being started, as [...]
The “entrep-multi” model
You have just made a cross-border acquisition. Now what? Perhaps the biggest challenge is to control a company bought abroad. You are in foreign land, where your employees speak a strange language, customs are peculiar and you have few friends, if any. On top, you have no time to move there yourself. How do you [...]