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Visit us at the SIA Executive Forum at the Fontainebleau in Miami Beach on
February 28-March 3, 2011 at Booth #226
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Many experts say Mergers and Acquisitions can be a risky proposition for the inexperienced, the poorly prepared and the less diligent. It is certainly not for the feint hearted or the headstrong personality who assumes if it was their idea it has to be a good plan.
Successful acquirers must be prepared to alter the deal or even abandon it if the premise on which they embarked on that particular journey proves unsustainable. Successful acquirers cannot afford to fall in love with the desired results of a transaction that may not come to fruition. Some deals look better from a distance.
However, Staffing Industry M & A deals typically tend to perform better than the general run of the mill M & A transactions; especially if both sides are clear on what can realistically materialize by a joining of their forces and when appropriate due diligence is not short-changed.
Why we believe M & A activity will be on the rise
When you have historically low interest rates, less volatile equity markets and stock trading at low forward multiples that is when mergers and acquisitions are going to be active.
M&A activity tends to be driven by favorable market conditions, but that drive really begins with broader strategic objectives that are complementary among the parties in the M&A transaction.
The objectives of the buyer and the seller come together in a way that propels the transaction forward. For example, one or both organizations may need the M&A transaction in order to survive; or perhaps the move will enable a leaner, more profitable company; or it will better position the resulting company for necessary growth.
Despite the grim statistics, there are many compelling reasons to attempt an M&A transaction, but they must be done with a solid understanding of the risks and challenges involved.
Why Consider an M&A Transaction as a Buyer?
There are many strategic reasons why mergers or acquisitions are considered in the first place, and include:
· To gain economies of scale
· To increase financial growth
· To achieve vertical integration
· To eliminate competition
· To acquire new assets
· To hedge a counter-cyclical business
· To gain Intellectual Property (IP)
· To expand into new markets
· To expand into complimentary products and services
· To eliminate emerging IP and product threats
· To acquire new customers to create more value for your current company when you sell
The need or desire to acquire or merge is always present in the business world but the challenges are many.
Why Consider an M & A transaction as a Seller?
· To liquidate some or all of your business assets
· To prepare for your succession strategy
· To play the game on a larger playing field
· To create more opportunities for your valued staff
· Increase access to talent and markets
· Access to stronger corporate offerings for your customers
· Increased availability of capital, insurance coverage, etc.
· Access to more corporate services so you can focus on the growth of your business more fully
And finally, but most importantly
- To fulfill your exit plan goals
Do any of these reasons resonate with your organization?
If so, please contact one of us to discuss your options. All discussions are confidential and there is no cost or obligation.
With our experience we can help you maximize the likelihood that your transaction will be a success.
Contact Sam, Bob or Mike, who have successfully completed over 125 staffing industry transactions, if you'd like to discuss M & A matters related to your staffing firm.
http://www.racohenconsulting.com/contact.html
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