Capstone Webinar:
Keys to Integration Success
Thursday, September 17, 2009; 1:00 PM ET

Hosted by David Braun, Capstone CEO

Join Capstone CEO David Braun as he leads a webinar on how to successfully plan and execute the integration of two companies.

The closing of a deal is the fruition of months — even years — of hard work. With it, though, comes a whole new round of work that begins the moment the ink dries on the agreement. The integration of companies is a major operation that requires skill, diligence and patience. It may come at the end of the buying process, but it kicks off a whole new episode — the marriage of two entities, each with its own history, capabilities, weaknesses and culture.

Capstone CEO David Braun will speak on how to make sure that the effort involved in completing an acquisition results in quicker benefits because of a smooth integration.

At the end of the Webinar, participants will be able to:

- Define the options for the level of integration after a merger
- Explain the metrics for a successful integration
- Begin to develop a 100-Day Plan for integration
- Begin the development of a communication plan for employees
- Use a Cultural Assessment Tool to understand cultural differences in two organizations
- Define secondment and why it is important for a successful integration

No Prerequisites or Advanced Preparation needed!

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!

The webinar is free and open to the public. David will speak for approximately 45 minutes followed by a 15-minute question-and-answer session.

Date: Thursday, September 17, 2009
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT

Once you register, you will receive information on how to listen to the webinar and view the slides.

Please feel free to forward this information on to anyone who might be interested in corporate growth strategies.

For questions or concerns, please contact Matt Craft, Capstone’s Marketing Coordinator, at 202-776-0500 or mcraft@capstonestrategic.com

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

On Friday, August 21, 2009, Capstone will be hosting a webinar on maximizing the time and effort put into due diligence in the acquisition process.

Due diligence has traditionally been seen as a “check the box”  exercise - you evaluate the strengths and weaknesses of a target, uncover liabilities and understand risk in order to determine whether to proceed with the acquisition.

While these are all still valid and necessary reasons, a new way of thinking about due diligence has come to the forefront.  Due diligence will allow you to find opportunities to boost the likelihood of success for a deal.  Due diligence can:

- Pave the way for a smoother integration
- Identify “stars” that will help the newly formed entity grow
- Craft a creative deal structure to allow a deal to flourish

Due diligence is about more than just looking for red flags and hammering the target for more and more information.

The webinar is free and open to the public.  There will be a a 45 minute presentation followed by a 15-minute question-and-answer session.

Date:  Friday, August 21, 2009
Time: 1:00 PM ET/ Noon CT/ 11:00 AM MT/ 10:00 AM PT

To register, please follow this link:

https://www2.gotomeeting.com/register/117587779

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

In another installment of our video series, I discuss what “Synergy” really means.  Synergy is a word that gets bandied around a lot in the world of M&A.  When discussing potential deals, companies often try to justify a mediocre deal by talking about all of the synergies that will result.  Really, though there are only two types of synergy - to find out what they are, watch the video:

What do you think?  Am I right? Or are there more types of synergy? Feel free to discuss below.

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

My company Capstone is in the business of helping clients with external growth, and that usually means buying another company. But not always. It’s easy to miss a rich field of alternative opportunities if you just latch on to acquisition.

Let me just focus on one of these: minority interest ownership. This surprisingly neglected tactic has many significant benefits. First of all, assuming you have a limited budget to invest in external growth, buying several minority interests allows you to spread your risks. You don’t have to put all your eggs in one basket. 

Secondly, you can purchase an interest in a company that would otherwise be too expensive, or too big for you to comfortably acquire whole. 

A third benefit is that your investment as a minority owner is unlikely to trigger the departure of a management team that you may want to see remain for some years to come.

An instinctive objection arises when I raise the possibility of minority interest purchases with clients. “But we want to control the company we are buying” They think of minority ownership as a kind of passive investment where you effectively have no decision power over what happens. 

In reality, you can often have your cake and eat it — purchase a minority interest and exercise the control needed to achieve your goals. If there are specific results you are seeking from an acquisition, you can have these written into your minority purchase agreement. They might include customers, suppliers, technology, personnel or any other asset that is motivating you to make a purchase. If you are looking for more widespread influence, you can also stipulate a presence on the board. 

Sometimes a small piece of a big pie is all that’s needed to satisfy your company’s hunger for growth.

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

If you want to read a decent book on M&A, be prepared to spend $70 or $80, and set aside several days to plough through a heavy-duty tome for business students. There are exceptions, but for the average business reader there’s remarkably little to guide you through our world of deals.

So I’m writing a book. And it won’t be 500 pages long, or cost $70! The working title is “A CEO’s Guide To M&A” and its really for the kind of people I do business with — leaders of substantial companies and divisions in the mid-market sector. 

M&A has a peculiar aura in the business world. On the one hand, there’s the fascination of massive corporations eating each other alive. On the other hand, there’s all that dreary academic literature. The subject seems simultaneously glamorous and impenetrably dull. 

In reality, most acquisitions are not multinational mega-deals. Every year, hundreds of transactions are consummated between companies below the $1 billion revenue level, the majority privately owned. You will rarely read about these deals in the business press, and by definition a private transaction yields less public information. Yet this activity is absolutely essential to a healthy economy. 

One thing I’ll be emphasizing in my book:  the true function of an acquisition is not just growth, but recalibration. Buying another company will change yours, for better or worse depending on how strategic your approach. By the same token, M&A as a whole serves to recalibrate entire industries. It’s one of the market’s most effective mechanisms for self-correction and positive evolution.

That’s why I’m hoping my work will interest the general reader, as well as CEOs. The better you understand acquisitions, the better you understand business itself.

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

I was asked the other day what can be learned from the possible merger of GM and Chrysler. Specifically, what might this union of giants teach the M&A market lower down the food chain?

As I’ve said elsewhere, this is a time when corporate mergers can appeal to those struggling with a hostile economic climate. Reducing competitive pressure, cutting costs, gaining market share… All seem like good outcomes when two players in the same market consider forming a single new entity.

My concern about the GM-Chrysler engagement is that it models a marriage based on weakness. Both companies are in trouble, and in my experience two failures don’t make a success. The underlying problem is that mergers of this kind are driven by an agenda to cut costs. No company grew rich on that agenda alone. To win the business game, you have to keep developing new products or finding new markets — or both.

On the positive side, a merger of this kind can buy you time. That may be good enough reason for the auto makers to tie the knot. But only if they immediately launch a proactive campaign of true innovation in products and/or marketing.

And that should be happening anyway.

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

Watch out for one defensive M&A strategy in times of financial stress. Instead of selling, weaker companies under threat may seek mergers with other victims of the crisis. Expect to see quiet talks between struggling competitors, looking for ways to wring out the costs and create a new, stronger entity.

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

A short while ago, banks were pressuring struggling companies and seemed only too eager to move them into the “distressed” category, or effectively force them to sell. Recently, there’s been a dramatic reversal of attitude. The last things banks want on their hands is a host of collapsing companies. So you’ll find a very liberal attitude right now. That doesn’t mean that new credit is easy to come by, of course. As we all know that’s as rare as the unicorn right now. But if you have existing obligations to your bank, you may find new ways to work with them. They want you to stay in business, and you can use that need to your advantage.

What does this mean for mergers and acquisitions? What does this mean for buyers? For those with a strong balance sheet, there are opportunities to work effectively not only with troubled sellers but also with the banks that service them.

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