H-P is acquiring Palm for $1B and they say it is to position them further into the smartphone market which reportedly grew by over 60% last year.  H-P’s head of strategy, Shane Robison said “It’s an opportunity for us to get into a very big market”.   Understandable?  It is to me.  I’m not saying it’s a good strategy, but they have ONE reason for the acquisition and from my experience H-P is more likely to be successful because people get it.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, David Braun, H-P, M&A, M&A News, Mergers and Acquisitions, one reason, Palm

When our new clients inquire about how we make prioritization decisions with limited data in the world of M&A, our answer is simple and straight-forward – you don’t need all the information as long as you have the CRITICAL information.  Consider this process:

•         Step #1 – You need “screening” criteria that will help you (and your group) make a decision.

•         Step #2 – Find a trial acquisition prospect.

•         Step #3 – Gather prospect specific data for the priority criteria.

•         Step #4 – Test and refine your criteria.

•         Step #5 – Add acquisition prospects and benchmark how they “fit” versus the criteria (and against each other).

Use screening criteria and acknowledge you are not in due diligence so you don’t need everything at this phase of the prospecting process.  Evaluate acquisition prospects and SAVE resources by focusing on only gathering the RIGHT information.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, criteria, External Growth, John Dearing, M&A, mergers, Mergers and Acquisitions

Although it almost dipped back below today, the Dow broke the 11,000 mark earlier this week.  This psychological barrier will impact the M&A market since there is a strong correlation between the equities market and M&A, with M&A lagging a bit.

I continue to expect an increase in deal making, with the biggest growth to be hitting in mid-2011.  Companies are now gearing up for deals which take some time to get into place, but with a strong stock market, burgeoning balance sheets, and historically low costs for debt, I see the market starting to brew.  I still maintain you should keep your seat belt on because I fully expected non-participants of the M&A market are going to be shocked at how their competitors radically change over the next 12-24 months.  Many companies will be left eating dust while others blaze a new growth path.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, capital markets, Capstone, David Braun, Dow, External Growth, M&A, M&A News, mergers, Mergers and Acquisitions, stock market

Cerberus Capital Management agreed to acquire DynCorp for $1 Billion on April 12.  DynCorp is a Virginia-based defense contractor who focuses on low-technology, high people-centric government contracts in hostile areas like Afghanistan.  Cerberus, probably best known for its acquisition of Chrysler, sees this as a way to expand its government business. There were four things that I found interesting about this acquisition:

• This takes a public company private which should provide savings, but also means it will likely go public again in a few years when Cerberus wants a liquidity event
• The deal is a leveraged buyout (LBO) and a big one.  The WSJ reports the structure will be 2/3 debt and 1/3 equity, which is much lower than the more recent levels of 50% equity.
• There is a “go-shop” clause.  This provision gives DynCorp a month to find a better deal, which should quash a shareholders suits that it wasn’t a fair price.
• This is essentially one private equity firm selling to another.  So this is financial engineering more than strategic fit.

All in all this deal is another sign of the thaw of the investment communities involvement in M&A deals.   I still contend there is about another 12 months of unique balance in the market between buyers and sellers and I still expect a frothy M&A market starting in mid-2011.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, Cerebus, David Braun, DynCorp, External Growth, Integration, M&A, M&A News, mergers, Mergers and Acquisitions, private equity

PWC reported recently that 46% of CEO’s in their survey indicate they plan to sell their company, and of these 66% said they plan to sell within the next five years.  The primary reason cited in the report is to diversify and create liquidity.

My experience with CEO’s of privately held firms is they typically have most of their net worth in tied up in their company. They’ve seen the drastic drop in their stock portfolios, missed opportunities to sell at the market peak in 2007 and are getting closer to retirement age.  I had one CEO tell me he didn’t think he could last until the next big upturn in the M&A market and he can’t chance more downturns.

I think you will see a record number of owners looking to sell starting in the next 12 months (perhaps sooner if the capital gains tax debate resurfaces) and you have record amounts of cash sitting on the sidelines which will start moving into the market in the next 12-15 months.  Put on your seatbelt because I think we are preparing for a very exciting ride in the M&A market.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, David Braun, divestiture, External Growth, M&A, M&A News, mergers, Mergers and Acquisitions, PWC

Capstone Webinar:
Finding Opportunity for Growth in Tough Times
CPE Credit Awarded
Thursday, April 8, 2010; 1:00 PM ET

David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar.

David will focus on where you can find opportunity for growth in the toughest economy in a generation.  His main message remains, “If not now, when?”

You and your company may be trying to simply weather the current storm, but others, perhaps even your competitors, are getting stronger now and positioning themselves for the future.  David will offer solutions for how you can take advantage of the current climate.

After completing this course, you will be able to:
•    Use Statistical Evidence and Trends to Discuss Today’s Economy from a Historic Perspective
•    Define the Five Growth Options for Your Company
•    Explain why External Growth (Acquisition, Joint Venture, etc.) Can Be the Best Option for Your Company
•    Describe the Current State of the M&A Market Using Relevant Statistics and Indicators
•    Begin to Develop a Formalized Step-by-step M&A Process for Your Company

David will speak for approximately 50 minutes followed by a question-and-answer session.

Date:  Thursday, April 8, 2010
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT

No Prerequisites or Advanced Preparation needed!

To register, click here:  https://www2.gotomeeting.com/register/692231858

Registration Fee: $79

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 attending this webinar
Program Level:  Basic
Delivery Method: Group Internet-Based

Mark your calendar for our upcoming webinars for CPE Credit:
•    Thursday, May 6, 2010 1 PM ET: “Identifying the Right Markets for Expansion” - 1 credit in Business Management and Organization
•    Friday, June 5, 2010 1 PM ET: “How to Find Top-Notch Companies” - 1 credit in Business Management and Organization

Please feel free to 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, April 7 and the money will be refunded in full within 5 business days.  After 1:00 PM ET on Wednesday, April 7, 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, Capstone’s Marketing Coordinator, 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

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, Cisco, CPE, David Braun, demand, External Growth, M&A, M&A News, mergers, Mergers and Acquisitions, webinar

I recently had the opportunity to drive over 1,500 miles over a five-day span throughout the southeastern US.  Two things stood out to me during my drive.  One was the number of shuttered motels, empty and fenced-in distribution centers, and vacant storefronts in small towns and strip centers.  All glaring examples of the on-going economic issues facing the country.

The other thing, however, was an equal number of new motels, new and bustling stores and shops, and numerous service and manufacturing businesses obviously enjoying success and growth.  This dichotomy was side-by-side; regional influences and general economic malaise could not account for the differences.

I believe the difference was the planning and foresight of some owners, and the lack of same by others.  Obviously, some owners see these times as an opportunity – they are willing to think ahead and to plan, and to execute upon those plans, while others wither and die as they “wait to be rescued”.  Don’t be like those shuttered motels and fenced-in empty businesses – take the effort to plan ahead and be opportunistic - if not now, when?

Technorati Tags: Acquisition Strategy, acquisitions, Capstone, economy, External Growth, Growth, M&A, M&A News, mergers, Mergers and Acquisitions, road trip, strategy, wes teague