Overview

 

 

 

 

 

BUSINESS PLANS

 

 

 Introduction

 

 

 Maximizing Valuation

 

 

 

 

 

VALUATIONS

 

 

 Sample Reports

 

 

 Rule 409A

 

 

 

 

 

GROWTH CAPITAL

 

 

 Venture Capital

 

 

 IPOs

 

 

 

 

 

SELL YOUR BUSINESS

 

 M&A

 

 

 Divestiture

 

 

 

 

 

USEFUL TOOLBOX

 

 

 Useful Links

 

 

 Capital Sources

 

 

 

 

 

ABOUT US

 

 

 Management

     Journal Articles
     Contact Us

 

 

 

How to Pursue...

Mergers and Acquisitions

 

An Interview with Harvard Capital Group.

 

Alternatives to M&A

Acquiring without Cash

Targeting the Right Candidates

After the Acquisition

M&A Client Profiles

How to Get Started

 

[If you want to sell your existing company, click here]

 


Alternatives to M&A

 

CEO:  Should I pursue a merger & acquisition (M&A)?

 

HCG:  Companies grow in two ways:  internal operations and by acquisition.  When mature resources are needed right away, acquisitions make sense.  The fast “technopace” beyond 2000 will make mergers even more common than today.

 

CEO:  Should I do a joint venture or an acquisition?

 

HCG:  The first step is to assess why the added resources are needed.  Is it to broaden the product line to reach a critical mass?  Is it to gain access to new customers?  Is it the brand name we want?  Is it to gain access to strategic technology?  Then we ask, is there a way to do this without an acquisition?  Many companies forget that joint ventures or contractual liaisons are more flexible than acquit ions.  Mergers are ideal when the need is long term, or when operations have to be tightly integrated at many levels.

[back to the top]


Acquiring without Cash

 

CEO:  I’m not sure I can afford an acquisition.

 

HCG:  That may be, but if there is a strategic fit, can you afford not to acquire?  If you don’t have the cash, we might be able to do a private placement or a leveraged buyout.  Sometimes, you can buy a company without cash by using your own stock.  Another possibility is to do a reverse merger, where the other company acquires you.  If there is a strategic logic to putting two companies together, lack of cash should not be a barrier.

[back to the top]


Targeting the Right Candidates

 

CEO:  If an acquisition makes strategic sense, whom should we target?

 

HCG:  Once we know whom we want to acquire, the next step is to decide the scope.  What size company are we looking for?  What geographical aspects?  What company culture do we want?  What financial resources should the target have?    In general, what specific resources – at a very detailed level – are we looking for?

 

CEO:  How do you narrow down your search?

 

HCG:  Ironically, the more narrowly we define our objectives, the easier it will be to define whom to approach.  We look at our contacts, and supplement that with several in-house databases.  Using our selection criteria, we whittle the list down to a workable number of candidates.  Then we look at each of these under a microscope before approaching them.

 

CEO:  But don’t you prepare a document to show them?

 

HCG:  No deal, however introduced or whatever the merits, will receive proper consideration without appropriate collateral documentation.  High-level mergers require appropriate documentation for the various corporate officers, accountants, attorneys, and technical experts to be of the same mind without unnecessary time delays or misunderstandings.

 

We have been told our “black books” are among the best in the industry.  For M&A work, they are usually modular to allow us to adapt them to the special characteristics of each candidate we approach, and to provide information on an “as need to know” basis, to avoid untimely confidential disclosures.

 

CEO:  How do you approach each candidate?

 

HCG:  Because of the sensitive nature of acquisitions, we normally approach the CEO directly and discreetly.  If the deal makes sense, high-level discussions, negotiations, and the final acquisition and merger will follow.

[back to the top]


After the Acquisition

 

CEO:  Are you done when the candidate says "yes"?

 

HCG:  We will work with you through final negotiations.  After the acquisition, there are issues of the merger itself where the two entities are blended together to realize their synergies, without destroying the essence of what made each company great.  As you grow, since we are familiar with your Company, we can help you with a Private Placement of equity, or even your Initial Public Offering (IPO).

[back to the top]


Our Target Client Profile (for M&As)

 

Entrepreneur:  What kinds of clients are you looking for?

 

HCG:  We do not accept all companies as clients.  Our ideal M&A Client Profile is defined below:

 

Clearly Defined Goals

Doe Does the acquiring Company know why it is acquiring?  Is there a strategic fit that would make sense to the target, its key management and other key stakeholders? 

Ability to Finance

Does the acquiring Company have a realistic possibility to pay for the acquisition (stock or cash), or is the purchase contingent on the seller carrying a note, or arranging leveraged financing based on the acquired company’s balance sheet.

Ability to Absorb New Company

Does the acquiring Company have sufficient management depth to absorb and properly manage the acquired company?

Location

The acquiring Company located in Western U.S.

Growth Industry

We can look at any industry, but for M&A work we prefer one of those below:

Communications

Computers

Consumer

Distribution

Electronics

Energy/Natural Resources

Finance/Insurance

Genetic Engineering

Healthcare Services

Industrial Products & Equipment

Internet

Medical Devices

Software

[back to the top]


Getting Started

 

Entrepreneur:   How do we get started?

 

HCG:   If you want to take the next step, click here

 

 

 

 

Contact Us | Home | Business Plans | Valuations | Raising Capital | Toolbox | About Us

(c) 2010, 2011, 2012, 2013 Harvard Capital Group