A minority of investors have expressed concerns that midmarket activity may actually slow down in 2014, compared with 2013 activity levels. Growth in the middle market may plateau for a few reasons all of which hinge on uncertainty in the economy including sequestration and the ongoing open-discussion over the U.S. debt ceiling. Health-care reform costs …
Category: M&A and External Growth
In Facebook – WhatsApp Deal Strategy Trumps Numbers
Facebook announced it will buy WhatsApp for $19 billion on February 19, 2014. There is no way that I can, in any credible means, justify or explain the purchase price because it’s absurd in my opinion. WhatsApp has no advertising revenues and charges each of its 450 million active users a yearly fee of just …
The Greatest Hurdle Facing Tech Mergers
The biggest tech M&A disasters were the Time Warner-AOL $350 billion merger and Google’s $12.3 billion acquisition of Motorola Mobility. In my observations, the greatest hurdle facing tech mergers is integration. Even where the strategy of the acquisition is solid, if the integration of the two workforces and assets is not executed properly, it will fail. Even …
Focusing On the Right Growth Opportunities
The following question was asked during our most recent webinar, “Discovering Markets.” Q: How do you choose which quadrant of the opportunity matrix to focus on? A: When beginning to plan for external growth, you may be blown away by the sheer number of possibilities and options. As exciting as they may appear, you’ll have …
Lessons From the Suntory – Beam Acquisition
Japan’s Suntory is making a big investment in buying the makers of Jim Beam for $13.6 billion. Jim Beam is a highly branded U.S. company and this deal is second largest acquisition of a U.S. company by a Japanese buyer. The underlying concept is the folks in Japan have recognized their domestic markets are not …
Capstone Serves as VALET Program Partner for Over 10 Years
Capstone again participated in the VALET Program Partner Roundtable, a program that helps companies throughout Virginia expand their international business. We have been selected as a partner for this award-winning program for more than 10 years. VALET offers a powerful combination of capital resources provided by the state along with professional services from expert, private-sector …
How to Address Price in the LOI
Although buyers usually prefer not to include price for fear of ramifications later, most sellers want to see a price mentioned in the LOI. If this is the case, I recommend inclusion. The key is to establish a narrow price range. If you believe the business is worth $35 million, then the LOI should propose …
Verso Paper – NewPage Acquisition: Capstone CEO David Braun Weighs In
Verso Paper Corp announced it will acquire NewPage Holdings, Inc. in a deal valued at $1.4 billion. While the coated paper industry is in decline due to the rise of digital media, this acquisition could make Verso Paper and NewPage stronger, according to CEO David Braun. Read his entire analysis in the Memphis Business Journal. Photo …
Top Mistake Leaders Make When Pursuing M&A
Many leaders take a reactive rather than proactive approach when it comes to M&A. They often realize that their organic growth is stagnant and they’ve got some money they can leverage, so they decide to make an acquisition. What do they do? They go find for-sale companies or respond to those that have found them. …
What Consolidation Means for the Middle Market
Last week, Sysco announced it would buy rival US Foods for nearly $3.5 billion. Sysco is already a huge player in the food industry with customers ranging from the US military to schools to five-star restaurants. This deal brings together the two largest food distributors in the US, increasing Sysco’s share of the food distribution …
