Edelman Financial Group agreed to sell their business for $258 million which is reported to be a 43% premium over their stock price. The interesting thing is the agreement includes a 40 day “go-shop clause” where the company can seek higher bids. I have been talking about these provisions for several years and expect you’ll see it used more often. Essentially, it lets the seller find a buyer then announce to the world that this is our offer and beat it if you can. This is designed to reduce the lawsuits from shareholders who might complain that the company didn’t get top dollar, but at the same time allows the company to run a very quiet auction and only announce once they have a sure deal.
Capstone Webinar: How to Pick Top-Notch Companies
March 20th, 2012 
Matt Craft John Dearing, Managing Director of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar.
You’ve formulated your acquisition strategy. You’ve assembled your growth team. You’ve researched and selected the top markets for growth. Now, let Capstone show you how to find the best acquisition targets in those markets.
The next step in Capstone’s unique market-driven process, acquisition prospect research and selection doesn’t have to be a haphazard ordeal. This webinar will show you how to approach the search for the right company systematically and efficiently using effective research methods. You will be able to take the emotion out of the process to objectively determine which prospects to approach.
Date: Wednesday, March 28, 2012
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT
No Prerequisites or Advanced Preparation needed!
Register Here: https://www3.gotomeeting.com/register/669952070
Registration Fee: $79 earlybird if registered by Friday, March 23.
After March 23, $99
IMPORTANT PAYMENT INFORMATION: Once you register, we will send you a request for payment via PayPal (may take up to 24 hours). Once payment is confirmed, your registration will be approved and you will receive the log-in information for the webinar.
CPE Credits – 1 CPE credit in Business Management and Organization will be given for those actively participating in this webinar
Program Level: Basic
Delivery Method: Group Internet-Based
Please forward this information on to anyone who might be interested in corporate growth strategies.
Refund policy: Requests for refunds must be received in writing by 1:00 PM ET Monday, March 26 and your registration will be refunded in full within 5 business days. After 1:00 PM ET on March 26, a credit will be given for a future webinar. In the event of a cancellation, you will be given the option of of a full refund or applying your fee to a future webinar.
For questions or concerns, please contact Matt Craft at mcraft@capstonestrategic.com
Monkey See, Monkey Do
March 6th, 2012 John Dearing While visiting my brother’s family and partaking in a delicious cupcake during my niece’s one year milestone birthday celebration, I had a valuation thought…she was doing what most kids at that age do: copying the older kids’ movements. Waving, smiling, stuffing cake in her face and, of course, throwing everything.
Adults, some very experienced, tend to do the same thing when discussing valuations in the world of acquisitions. What is the multiple? How many times EBITDA should we pay? What is the market paying for companies like this?
These are dangerous questions if you ask me. Why would you look at someone else to decide what you should pay? Who knows what the circumstances were for the comparable transactions? Instead of mimicking others, I think it is much more compelling to look at what the target is worth to you, listen to the current owner to determine his or her needs, and build a value and price equation based upon those inputs. Avoid copying mistakes.
Why is Fortis Acquiring CH Energy?
February 22nd, 2012 David Braun Fortis, Inc (TSX: FTS), a Canadian utility company, announced yesterday that it is acquiring CH Energy Group (NYSE: CHG) for $1B in cash plus the assumption of $500K in debt, which is about 10x 2011 EBITDA.
CH Energy, which is a public utility headquartered in Poughkeepsie, NY, said this about the benefits of the acquisition: “there are expected to be customer benefits that could include any or all of the following: offsetting or deferring future rate increases, enhancing the quality of service to customers or making that service more affordable. Customers will also benefit through adoption of Fortis best practices and enhanced access to capital to fund investments that will improve service and access to technology. And, our employees will benefit from enhanced opportunities in a larger, financially strong parent company that is committed to maintaining existing wages and benefits.”
Not compelling if you ask me.
The Fortis CEO said “This is the first step in our strategy to add value for Fortis shareholders by selective acquisitions within the United States of well-run, promising regulated electric and natural gas utilities.” He went on to basically say everything will stay as it is at CH Energy.
Maybe it’s just me, but I can’t figure out their “One Reason” for this acquisition. I expect it has more to do with financial engineering on cost synergies than anything else. When there is no clear strategic fit, I don’t get too excited about the success of the acquisition. Now there are loads of law firms claiming the Board should have shopped this deal to get the best value rather than agreeing to sell to Fortis.
Stay tuned, I expect there is more to come.
Capstone Webinar: Picking Top-Notch Markets
February 20th, 2012 Matt Craft Wednesday, February 29 at 1:00 PM ET
David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar to help you understand the market and to help stimulate the growth of your business.
There is a unique opportunity in the market to grow your business through M&A. However, before you start to go after acquisition prospects, you need to make sure you are looking in the right markets.
David will discuss Capstone’s unique market-driven process, which centers around future demand: What will your customers want in 5, 10 or even 15 years? Anticipating this demand is a key to future success.
In order to determine what that demand will be requires research. The webinar will delve into where to begin with research and how to use limited resources to get the critical information you need to make a decision.
There will also be insights on how important research into market trends is to ensuring you are targeting the best companies to acquire.
David will speak for approximately 50 minutes followed by a question-and-answer session.
You’ll learn how to:
- Define the Market-Driven Process and why it makes sense for your company
- Explain Market Criteria (including market growth and size, competitive dynamics and barriers to entry) and how to use criteria them to evaluate a market or segment
- Describe effective Secondary and Primary Market Research techniques to maximize your research resources
- Explain the Triangulation Technique for market research to get the most relevant information to make decisions
- Begin to develop Specific Tools to objectively compare and contrast markets
Date: Wednesday, February 29, 2012
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT
No Prerequisites or Advanced Preparation needed!
Register here: https://www3.gotomeeting.com/register/877777734
Registration Fee: $79 earlybird if registered by Friday, February 24.
After February 24, $99
Capstone Webinar: Keys to Integration Success
October 24th, 2011 Matt Craft Don’t let a rocky integration spoil the fruits of a partnership that has been primed for success. Let Capstone help you understand how to plan and prepare for a happy marriage of two companies!
David will speak for approximately one hour followed by a question-and-answer session.
You’ll learn how to:
-Explain the different levels of integration in order to decide how much to integrate after the deal is done
-Begin to develop a 100-Day Post-Closing Plan
-Explain effective communication strategies for integration success
-Define cultural differences in organizations and how to bridge them
-Utilize secondment to your advantage
CLick here to register:
https://www3.gotomeeting.com/register/803623286
Date: Thursday, October 27, 2011
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT
No Prerequisites or Advanced Preparation needed!
Registration Fee: $79 earlybird if registered by Monday, October 24
After October 24, $99
IMPORTANT PAYMENT INFORMATION: Once you register, we will send you a request for payment via PayPal (may take up to 24 hours). Once payment is confirmed, your registration will be approved and you will receive the log-in information for the webinar.
CPE Credits – 1 CPE credit in Business Management and Organization will be given for those actively participating in this webinar
Program Level: Basic
Delivery Method: Group Internet-Based
Please forward this information on to anyone who might be interested in corporate growth strategies.
Refund policy: Requests for refunds must be received in writing by 1:00 PM ET Wednesday, October 26 and your registration will be refunded in full within 5 business days. After 1:00 PM ET on October 26, a credit will be given for a future webinar. In the event of a cancellation, you will be given the option of a full refund or applying your fee to a future webinar.
For questions or concerns, please contact Matt Craft at 703-854-1910 or mcraft@capstonestrategic.com
Capstone Strategic, Inc. is registered with the National Association of State Boards of Accountancy as a sponsor of continuing professional education of the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 4th Ave N, Suite 700, Nashville, TN, 37219-2417. Website: www.nasba.org
Back to School
September 15th, 2011 John Dearing As children head back to school this Fall, I found myself thinking about the descriptors used to paint a picture of a child going to school and executives entering the world of M&A for the 1st time. Fear and apprehension about the unknown. Will I succeed? Will we be able to keep up? Will I have fun? As they get older, how will I be perceived? What can I do to be received well and form lasting, valuable friendships? On the other side of this parallel – Excitement! Energy! Passion! Desire to make it work and excel. Be self-confident.
In between, you have sponges for data who take it all in not wanting to miss anything and ‘eyes wide open’ references that are applicable to both situations. Why are the vast majority of the fears worked through? I am certainly not a child-psychologist, but I would venture to guess that somewhere in the reams of research out there, someone has concluded that the children benefit from structure, process, and leadership from experts. As we lead our clients through proactive M&A growth programs, I see executives benefit from these same things – putting their fears aside because of the tools and increased predictability, most thrive as a result of process and turn that fear into passion and success in the new environment.
Recipe for a Valuation
August 18th, 2011 administrator By John Dearing
As someone who has always preached that valuation is more of an “art than science”, I found it interesting when reading a recent Washington Post article on cooking ribs that one of the experts used this same phrase. Of course, he was referring to the ambient temperature outside of the smoker and the amount of rub and spices utilized, not expense-down assumptions and the correct discount rate. Nevertheless, I find the phrase applicable in the world of M&A. 
When we delivered our recent valuation webinar series, the “art” definitely shined through as participants asked questions about real life situations. The “science” was presented as frameworks and processes that provide folks on the M&A teams with a way to set up conversations to test the inputs. This same rib cooking expert said “be a sponge…learn all you can about the different techniques – learn how different people may approach the same situation differently.” Then, like valuation, use the best practices and see what works for you and your organization. Whether you enjoy baby back, St. Louis-style or spare ribs – OR – the income approach (better known as DCF or Discounted Cash Flow), market approach (comps) or asset methods – there is no doubt that there are immediate benefits when you learn the art of valuation.
Where is your growth?
August 17th, 2011 administrator by David Braun
Beer consumption in the US is growing at 1-2% a year according to the National Brewing Association, I know I’m doing my job of contributing to this growth, but apparently many of you are not!
In Brazil the growth rate is over 10%! So no surprise that Kirin is acquiring a stake in Schincariol the #2 player. Anheuser Busch long ago figured out that finding growing markets beyond the US was a better recipe for them than trying to get into products they really didn’t know, for example Eagle Snacks. Many US companies today are struggling with no or low growth markets and struggling with how to expand. Often they resort to product extensions which can be very successful, but still serving the same slow growth market. Other times I see them try marketing gimmicks to attract attention. Unfortunately, this often leads to downward price spirals leaving them in a slow growth market…. with lower margins. I think you have to take a step back and really look at your market – globally – to identify the growth you should target.
I’ll bet you a beer Kirin will like the Brazilian market.
Webinar: Successful Negotiation Tactics
August 11th, 2011 Matt Craft David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar on Wednesday, August 31.
As an experienced negotiator of dozens of deals, David will discuss the methodology and best practices for getting a deal done. He will also give tips and tricks to ensure you get what you need to consider the deal a success, while protecting the relationship you’ve built with a target company.
Your primary goal for negotiations is to have the decision-makers in each organization come into alignment with the overarching strategy behind the deal. Once both sides are excited about the possibilities of the union, the minutiae can be hammered out. If you always keep the master plan in perspective, the wrangling over the details will be considerably less acrimonious and more productive.
David will speak for approximately one hour followed by a question-and-answer session.
Date: Wednesday, August 31, 2011
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT
No Prerequisites or Advanced Preparation needed!
To register, please click on this link: https://www3.gotomeeting.com/register/863843758
Registration Fee: $79 earlybird if registered by Friday, August 26
After July 22, $99
IMPORTANT PAYMENT INFORMATION: Once you register, we will send you a request for payment via PayPal (may take up to 24 hours). Once payment is confirmed, your registration will be approved and you will receive the log-in information for the webinar.
CPE Credits – 1 CPE credit in Business Management and Organization will be given for those actively participating in this webinar
Program Level: Basic
Delivery Method: Group Internet-Based
Please forward this information on to anyone who might be interested in corporate growth strategies.
Refund policy: Requests for refunds must be received in writing by 1:00 PM ET Tuesday, August 30 and your registration will be refunded in full within 5 business days. After 1:00 PM ET on August 30, a credit will be given for a future webinar. In the event of a cancellation, you will be given the option of of a full refund or applying your fee to a future webinar.
For questions or concerns, please contact Matt Craft at 703-854-1910 or mcraft@capstonestrategic.com
Capstone Strategic, Inc. is registered with the National Association of State Boards of Accountancy as a sponsor of continuing professional education of the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 4th Ave N, Suite 700, Nashville, TN, 37219-2417. Website: www.nasba.org
