Two separate clients asked me for a Letter of Intent (LOI) sample within 48 hours.  Other typical questions include:  “What should an LOI contain (or not include)?” and “Why use an Memorandum of Understanding or a Term Sheet versus an LOI?”

Capstone looks at an LOI (and all of its derivatives) as a “marketing” document.  Especially in the not-for-sale M&A space, the LOI needs to “stand on its own merits”.  Meaning, the owner/audience and the direct influencers, need to be able to quickly understand three things:
•    Why you are interested in their specific company (e.g., talent, customers, markets, technology, etc.)?
•    What is your “vision” for the combined entity (e.g., joint benefits, why stronger together, etc.)?
•    What you are offering (beyond simply a price)?

To increase your likelihood of success, include components in your LOIs that clearly outline how you are addressing the owner’s needs, wants, and desires.  The owner ‘Hot Buttons’ as we refer to them. If you address them, letting the owners know you heard what they said while positioning your LOI as a stand-alone marketing tool, you will get more YES answers and “sales”.

Technorati Tags: Acquisition Strategy, acquisitions, Capstone, External Growth, John Dearing, Letter of Intent, LOI, M&A, mergers, Mergers and Acquisitions, MOU, Term Sheet

Tuesday’s Wall Street Journal had an article about how poorly large private equity deals have performed.   No wonder.  What value do they bring to the company?  Stripping off and selling key assets, re- re-leveraging the balance sheet.   How does this financial engineering grow or improve a company?

Well, maybe some financial discipline is needed.  But I stand by my philosophy of Strategy First - why are you buying the company in the first place and what are you going to do with it?  Seems to me with all these poorly performing PE deals, it is time for strategic companies to step in, buy them back and grow them.

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

Capstone Webinar: Discovering the Right Markets for Growth

David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar with Capstone Senior Analyst Matt Craft.

There is a unique opportunity in the next 12-15 months 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 and Matt 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.

After completing this course, you will be able 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

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

Date:  Thursday, May 20, 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/859711747

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

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, May 19 and the money will be refunded in full within 5 business days.  After 1:00 PM ET on Wednesday, May 19, 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, David Braun, External Growth, M&A, market research, Matt Craft, mergers, Mergers and Acquisitions, webinar

Nothing like today’s considerable drop in the market to remind everyone that the economy remains on shaky ground.  I stand by my past prediction that the market will not improve dramatically for another 12 months.

This turmoil does two things.  It makes sellers more fearful that the bottom could fall out again and it may be time to hitch their wagon to another team of horses.  It also adds fear to buyers who aren’t convinced they want to plunk down a bunch of dough when the market may not make it rise and bake into something meaningful.

So I contend we continue to have parity among buyers and sellers, but I also contend for those with strong stomachs and solid strategic plans, this could turn out to be a great time to be a bold buyer.  Remember the adage “buy low, sell high.”  The market is low for many buyers.  So do you really believe the saying  or it just sounds nice for other people?

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