International Development & Finance
                               
                                                          CORPORATE ACQUISITIONS

    Acquisitions can be very beneficial to companies for a wide range of reasons, including:

  • economies of scale
  • expansion of geographic territory and distribution capability
  • expansion of product lines and/or proprietary technologies
  • synergies with existing product or service base
  • diversification of revenue base, and/or of seasonality or cyclicality of the business.
  • expansion of executive and middle-management talent base
  • rejuvenation of corporate culture
  • improved brand recognition

    The bottom line is that an acquisition should provide the acquiring company with better survival
    capability and better earnings per share over the following years..

    Acquisitions can also be highly risky undertakings if they involve:

  • significant increases in debt and debt service requirements
  • significant balance sheet impairment to the buyer, or tax exposure to the seller.
  • the merger of very distinct corporate cultures
  • a lack of synergy or complementary corporate value
  • integration of vastly different systems and processes.
  • no economies of scale

    IDF helps companies to evaluate, select, negotiate and finance corporate acquisitions.  As an
    objective third party, IDF helps clients to consider the positive and negative aspects of specific
    corporate acquisitions.  IDF assists clients to conduct the due diligence required to fully evaluate the
    merits and best financial structure of an acquisition transaction.

                                                          CORPORATE DIVESTITURES

    Private companies are often sold when the founders seek to retire and simplify their estate matters,
    and when there is no succession plan for the company.  In such cases, management or employee
    buyouts are an option, as well as the outright sale of the company to a third party.

    Companies also often determine that their mix of products and services, or corporate assets and
    liabilities are not optimised for current market conditions.  It can become beneficial to divest a
    company, division or a subsidiary if:

  • a company has excessive debt and needs to downsize to pay down debt quickly
  • a division or subsidiary has poor operating performance and management has
                             been unable to effect a turnaround in that performance.
  • a division or subsidiary has no synergy with the rest of the company
  • the division or subsidiary is a "cultural bad apple" among thriving units.

    IDF helps retiring owners and ongoing companies to develop plans, presentations and marketing
    strategies related to proposed divestitures.  As a discreet third party, IDF assists owners in these
    activities without disrupting morale within the company or division to be divested.  IDF also can
    skillfully pre-screen potential buyers to ensure that owners do not waste time with unqualified parties.
    In cooperation with tax accountants and corporate attorneys, IDF can help sellers to divest companies
    or divisions while minimizing taxes and other residual liabilities.

                                        Tel. (1)  832-878-4614, wgehle@internationaldiligence.com