M&A: From LOI to Close
CPE Credit Awarded
Thursday, March 11, 2010; 1:00 PM ET

David Braun is hosting a webinar with Capstone Senior Vice President Wes Teague.

Building on the success of our last webinar on Contemporary Legal Issues in M&A, Capstone is presenting a new program that will lead you through one of the most challenging, yet exciting parts of any deal:  The journey from Letter of Intent to Close.

This webinar will provide insight that any professional involved in M&A will want to know.

After completing this course, you will be able to:
•    Explain the structure of an Letter of Intent and how to make it beneficial to your situation
•    Describe how to manage the Due Diligence process from both the viewpoint of the Buyer and Seller
•    Utilize strategies to negotiate an agreement that is beneficial to both sides
•    Identify how valuation is affected during the Due Diligence and Closing process
•    Recognize what is expected at Closing
•    Begin to execute your Integration game plan
David and Wes will speak for 50 minutes followed by a question and answer session.

No Prerequisites or Advanced Preparation needed!

To register, click here: https://www2.gotomeeting.com/register/875225514

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.

Mark you calendar for our upcoming webinars for CPE Credit:
•    Thursday, April 8, 2010 1 PM ET:  “Finding Opportunity for Growth” - 1 credit in Business Management and Organization
•    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
For questions or concerns, please contact Matt Craft at 703-854-1910 or mcraft@capstonestrategic.com

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

Refund policy: Requests for refunds must be received in writing by 1:00 PM ET Wednesday, March 10.  After 1:00PM Wednesday March 10, 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.

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, due diligence, External Growth, Indication of Interest, Integration, Letter of Intent, LOI, mergers, Mergers and Acquisitions, webinar, wes teague

Clients always want to know how  we can quickly understand the perspective of the owner of the acquisition target.  Over the past 15 years focusing on the privately-held, not-for-sale space, we have a 98% success rate getting our clients in meaningful conversations and meetings with companies that are deemed to be a strategic fit.

The reason the Capstone approach is so successful is that it is truly unique – and we continue to hone it every day.  Many clients and prospective clients have experience ‘attacking’ owners with bulk mail and cold calls - which are almost always unsuccessful. Owners on the receiving end of this barrage tell me, “I get calls from people who want to buy my company every day.  I ignore them.”  This is in addition to CEOs who tell me that generic letters go straight into the ‘round file’.

If you were to talk to owners we target, you would hear a much different response.  Usually, it sounds like “I am not sure why I returned your call but something was different about you.  It seemed sincere…you know more about us.  It makes sense.“

You need to have the right data to deem a company attractive.  You need the right information to ‘open the door’ with an owner.  You need to have a well thought-out approach and story for the owner.  Remember, they not only don’t need to sell – they don’t need to talk to you.  Consider how you can alter that dynamic.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, External Growth, Growth, John Dearing, M&A, M&A News, m-and-a, mergers, Mergers and Acquisitions, owner contacts, owners

I was asked during a recent client review for my recommendation on when it was appropriate to divulge  leadership’s M&A intentions to the Board.

Based upon my experience, there is no time like the present. You want to avoid surprises. You want to get questions out “on the table” in time to develop answers. You want to avoid ‘dart throwers’ by getting your Board ‘on board’ with direction and rationale. You want to make recommendations as leaders but appropriately use advisors or the Board as ’sounding boards’ so you can develop the right analysis and complete due diligence to the satisfaction of the ultimate decision makers.  This will enable you to maintain deal momentum with the target owner.

I could go on but, “why wait?”  Engage with your Board, educate them on you market and prospect criteria, and keep them informed.

M&A is a “big” decision, so work toward alignment and get the Board involved early.  You will save valuable resources - both human and monetary.

Technorati Tags: Acquisition Strategy, acquisitions, board, business acquisitions, Capstone, due diligence, External Growth, John Dearing, M&A, m-and-a, mergers, Mergers and Acquisitions

The New York Stock Exchange ended 2009 up nearly 30% over 2008.  That makes a lot of individuals feel better about the economy because they “feel” wealthier.

Companies are no different.  With an up market we expect M&A activity to increase, generally as a laggard to the equities market.  Think about it:  a company’s stock price is up so they can use the stock as currency to buy other companies or as currency to obtain debt to acquire companies. Either way, we should  expect an uptick in 2010 M&A activity to follow the strong performance of the equities markets in 2009.

Warren Buffett commented on this topic recently when he skewered Kraft for its stock offer to Cadbury saying:

The share-issuance proposal, if enacted, will give Kraft a blank check allowing it to change its offer to Cadbury

Watch for more public companies to make acquisition announcements, especially after they report 2009 earnings.  This could be a good time to think about divesting!

Technorati Tags: Acquisition Strategy, acquisitions, berkshire hathaway, business acquisitions, Cadbury, Capstone, David Braun, divestiture, External Growth, Integration, Kraft, M&A, M&A News, mergers, Mergers and Acquisitions, warren buffett

These are tough times for the legal profession.  Here in Washington, DC, one of the lawyer-capitals of the world,  it’s difficult to go a block without running into a recently graduated law student who’s looking for a job.  In these tough times, many law firms, large and small, are looking for a way to grow their business.  Two firms that are looking to grow externally are Lovells and Hogan & Hartson. Their potential merger would create  one of the world’s largest law firms with over 2500 professionals. While they share the common thread of regulatory and antitrust work, the merger is based on geographic expansion.  Lovells wants access to the US market and Hogan wants more access to Europe, while both are seeking to expand their presence in Asia.

Geographic expansion may make sense if you carefully target your strategic partner and perform the necessary diligence on that geographic market.  If it’s a fit, new customers (or clients) can easily become accessible.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, David Braun, External Growth, geographic expansion, hogan & hartson, Integration, lovells, M&A, M&A News, Mergers and Acquisitions

There are countless books on how to effectively integrate two companies after an acquisition.  Some stress “communication” while others put the emphasis on “culture”.  While both concepts are important, neither is the key to integration success.  In my experience, the single best thing you can do to ensure a smooth integration is to buy the right company.
This may seem self-evident, but in many cases the choice of target is the hidden source of endless integration problems. If you’ve bought the wrong company, no amount of force or ingenuity can squeeze a square peg into a round hole. “The right company” means a company that serves a single, well defined strategic purpose. Experience shows that integration is infinitely easier when the buyer and the seller are aligned on the strategic rationale for the combination.  Throughout the entire acquisition process from market and prospect research through negotiations and due diligence, you have been looking for the characteristics, opportunities, resources, people and culture that will make an ideal fit with your own enterprise. Assuming you have done that right, it is reasonable to expect a relatively happy union.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, David Braun, due diligence, External Growth, Integration, M&A, Mergers and Acquisitions

Three recent deals are being heralded as “the revival” of the M&A market.  Although the linked article captures some of the larger buy-side deals (for example Disney’s $4 billion purchase of Marvel) that are now beginning to emerge, we here at Capstone are seeing a similar trend in the area of the market where we mainly focus: smaller to mid-size ($25 to $200 million) transactions. Firms are beginning to react to the apparent improvement in economic conditions (according to some indicators, but not all - see today’s unemployment numbers), and wish to capitalize on lower prices and expectations before a full recovery occurs.

Technorati Tags: Acquisition Strategy, acquisitions, Capstone, M&A, M&A News, mergers, Mergers and Acquisitions, wes teague

A recent study confirms what we’ve been saying for months: companies that are bold in these troubled economic times will reap the benefits of their actions.  As the study’s authors state:

“Companies with M&A in mind should be emboldened by our analysis: fortune favors the brave. Fears that M&A is riskier post-Lehman seem to be misplaced.”

The study cites Cisco as one company that has been making acquisitions during this time and has outperformed the major indices. Cisco is a classic example of a company making consistently making small, targeted acquisitions to calibrate their business.  One quote that has stuck with me in the past few months comes from Cisco CEO John Chambers this past March:

“Without exception, all of my biggest mistakes have come because I have moved too slowly.”

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, Cisco, David Braun, External Growth, Lehman Brothers, M&A, M&A News, Mergers and Acquisitions

I recently appeared on Jacobson & Katz: Inside Maine Business to discuss the current state of the mergers and acquisitions market, as well as the Capstone approach to the M&A process.

You can view Part One here:

And Part Two, here:

To see other episodes of Jacobson & Katz: Inside Maine Business, visit www.insidemainebusiness.tv

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, External Growth, John Dearing, M&A, M&A News, market research, Mergers and Acquisitions, video

At a seminar on the M&A process, I discuss the most common reason that acquisitions fail - and it might not be what you expect:

Have you been part of a failed acquisition?  What do you think was the main reason that it didn’t work? Let me know in the comments!

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