2b. Merger and Acquisition Flashcards
Increase shareholder value, and ensure culture fit
- Will be asked for a recommendation
Be clear and state recommendation.
- Private Equity firm Purchase A
Why does PE firm want to buy the Co?
- Private Equity firm Purchase B
What else does it own?
- Private Equity firm Purchase C
What does it plan to do with it? (hold it, flip it, break apart?)
- Company Purchase A
Why? What other products do they sell?
- Other Reasons to Purchase A
Increase market access, boost brand and increase market share
- Other Reasons to Purchase B
Diversify co holdings
- Other Reasons to Purchase C
Pre-empt the competition from acquiring the co
- Other Reasons to Purchase D
Inherit management talent
- Other Reasons to Purchase E
Obtain patents or licenses
- Other Reasons to Purchase F
Gain from synergies, cost savings, cultural integration, and expansion of dis channels
- Other Reasons to Purchase G
Gain tax advantages
- Other Reasons to Purchase H
Increase shareholder value
- Due Diligence: Research Co and Industry A
What kind of shape is the co you’re looking at in?
- Due Diligence: Research Co and Industry B
How secure are its markets, customers, and suppliers?
- Due Diligence: Research Co and Industry C
How is the industry doing overall? And how is the co doing compared to the industry? Is it a leader in the field?
- Due Diligence: Research Co and Industry D
What are the margins like? Are they high volume, low margin, or low-volume-high margin?
- Due Diligence: Research Co and Industry E
How will competitors respond?
- Due Diligence: Research Co and Industry F
Are there any legal reasons why we can’t or shouldn’t acquire the target co?
- Due Diligence: Research Co and Industry G
Are there technology risks?
