Acquisitions, Recapitalizations, and Exits
Mergers and acquisitions (M&A) transactions can be a viable alternative for accomplishing a number of strategic objectives in the context of building and realizing value for emerging growth and middle-market companies. This chapter is intended to provide an overview of the buy-side and sell-side processes, and a framework for thinking about and planning execution of these initiatives with a focus on financing the deal.
Acquisitions can meet a number of goals if approached and executed as part of a long-term strategy. Some of the typical reasons executives pursue acquisitions include:
• To accelerate revenue growth.
• To expand into a new geography or obtain a physical footprint in a new location.
• To access a new market or new customers.
• To access technology.
• To strengthen the pool of talent and capabilities.
• To fill in a product or service line.
• To reduce costs.
• To capture market share.
• To prevent a competitor from gaining these advantages.
provides an overview of the acquisition process. The first phase addresses finding a target company to buy; this process begins with the strategic plan, which lays the foundation to determine many of the parameters and the focus of the process. Take note that this process is really a condensed restatement of our basic financing process presented in Figure 1.1
, highlighting a specific strategic initiative (the acquisition). The second phase of the process is ...