30 Mar, 2010 | by
Topics: M&A, Strategy

post-merger-growth

A close friend and colleague of mine, Mehdi Farhadi, recently dropped me a line to say hello.  He simultaneously passed along one of his recent publications and asked if I’d be willing to share it on mybusinessmusings.com.  Without hesitation, I said YES.  You see, Mehdi epitomizes what it means to be a guru in the field of mergers & acquisitions.  While working together in Germany, back in 2008, on a major global transaction we frequently pontificated and debated various M&A concepts.  Strangely enough, it was a field of interest we instantly bonded on.  I vividly recall one particular discussion, which revolved around organic vs. inorganic organizational growth.  It was one of those pleasant conversations where we 100% agreed on all fronts.  Ironically enough, several years later, Mehdi has put together a great piece that took that discussion to a whole new level.  This article will actually appear as a chapter in a book he will be releasing in the near future called “Value in Due Diligence”.  Give it a read as the perspective is invaluable.  I especially love the chart he’s put together as it really tells a significant story.  Enjoy everyone and thanks for sharing Mehdi:

Business leaders strive for growth. Growth is essential to the well-being of companies. According to Ansoff (1957), “just to retain its relative position, a business firm must go through continuous growth and change.” Most companies consider external growth through mergers and acquisitions (M&A) – both asset and share deals – as one of the quickest ways to fulfil business growth objectives. Corporate marriages help companies to sustain profit growth and gain greater market share. continue reading »

13 Mar, 2009 | by

istock_000007412021xsmall

Better Prospects = Better Transactions

These are chaotic times for business valuation.  The old rules are changing to reflect the dramatic new reality of the markets.  Companies that were hanging on won’t make it much longer, and companies that need to sell will not receive the pricing they would have eighteen months ago.  Equity buyers call it the “catch a falling knife” metaphor.  Business valuation has always been more of a black art than a science.

Corporate buyers with access to cash receive far better returns on their acquisition dollars during recessions. Troubled deals that would be done in good times are being liquidated, mundane companies are finding it hard to get a fair multiple, and cash is at a premium.

All this points to acquisition as a growth strategy.

Those that discipline their acquisition process will improve their return on investment. continue reading »

4 Aug, 2006 | by

It’s been a while since I spoke to the GM saga, so I figured I’d chime with some interesting new developments. I recently read a great Fortune article about Carlos Ghosn, the CEO of both Nissan and Renault. It seems the prospect of fixing GM has struck Ghosn’s fancy. This new found interest could most succinctly be attributed to an invitation to assist by GM’s largest shareholder, Kirk Kerkorian. Kerkorian, who owns roughly 10% of GM, has made his presence felt by publicizing his dissatisfaction in the speed and steps being taken in the turnaround effort.

Enter Carlos Ghosn: Ghosn has been dubbed a turnaround specialist, by financial analysts and industry experts, for his past successes with reviving both Nissan and Renault. It seems Ghosn has proposed an alliance between his two organizations and GM. You heard me right. And here you thought he already had too much on his plate! continue reading »