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CEO Advisor® Newsletter
May 2017
Mergers and Acquisitions of Privately-held Companies

Mergers and acquisitions play a major role in many smaller and mid-size privately-held companies. Privately-held companies acquire or merge with other companies in order to remain competitive, accelerate growth or to grow their business to the next level.


A growth acquisition also enables a privately-held company to develop a competitive advantage by increasing their depth of management team, technology and intellectual property, flexibility, growth and shareholder value. The most common reasons for a private company to acquire or merge are strategic growth, talent growth, customer growth, entering a new geographic market or industry (buy vs. build) or preparation for an exit. CEO Advisor has decades of experience in mergers and acquisitions of private companies. Gain 

the needed expertise to evaluate your options.


Growth Transactions

There are several reasons why private companies choose to expand through growth transactions rather than grow internally or organically. First of all, growth transactions happen much faster, whereas organic growth takes time as sales grow. A privately-held company's goal may be to eliminate a competitor, enter a new industry or geographic market, introduce a new product line, acquire key technology, products or services, or bring on the talent and management team that results from a growth transaction.

Expansion can be accomplished through acquisitions, mergers, asset acquisitions and similar transactions. The following methods can be used to help a private company grow expeditiously.


Acquisition - An acquisition occurs when a public or private company buys the stock of another company. An acquisition may also occur as an "asset purchase", where rather than buying the stock, the buyer simply buys the entirety or a portion of the assets of another company. The assets may be tangible such as customers, inventory and machinery, or intangible assets such as intellectual property (software, patents and trademarks). The selling company may then continue as a smaller company or dissolve after the sale.


Merger - A merger is when two companies combine to form a single entity under a consolidated management and ownership. A merger can take place through an amalgamation or absorption.


Amalgamation is when two or more companies enter into the merger agreement to form a completely new entity. In this type of merger, both companies lose their identity and a new company is formed to manage the consolidated assets. Amalgamation tends to occur when both companies are of equal size.

Absorption is when the merger occurs between two entities of a dissimilar size. In such case, the larger company absorbs the smaller one. The merger dissolves the smaller company and places all of its assets in the control of the larger company.


Talent Acquisition - An acquisition-by-hire may occur especially when the target private company is quite small or is in the startup phase. In this case, the acquiring company simply hires the staff of the target private company, thereby acquiring its talent (if that is its main asset). The target private company simply dissolves and few legal issues are involved.


Strategic Alliance - A strategic alliance can range from a large distributor or reseller marketing and selling your products to a larger alliance with financial backing or special terms.


Joint Venture - A joint venture is when two or more private companies enter into an agreement to allot a portion of resources towards the achievement of a particular goal over a designated period of time. Synergies occur when businesses capitalize on joint opportunities or other combined efforts to obtain greater results than working alone, whether it is increased revenue or decreased costs or both.


CEO Advisor, Inc., has the expertise to guide your company through the many steps involved in a merger or acquisition. Mark Hartsell has over thirty years of experience in buying and selling companies coupled with the business expertise to meet your growth and exit strategy plans. Please contact Mark Hartsell, MBA, President at (949) 629-2520, by email at MHartsell@CEOAdvisor.com, or visit www.CEOAdvisor.com for more information.

The Importance of Planning

CEO Advisor, Inc. provides expertise in helping CEOs, presidents and business owners of small to mid-size companies focus on priorities to grow their businesses to the next level. We meet with many CEOs and business owners and we ask them critical questions about planning and managing their business such as: 


Does your company have a strategic plan?

Does your company have a defined sales strategy to maximize sales?

A marketing plan to optimize leads and fuel sales?

A monthly forecast as goals to drive your business forward?

Every business needs to plan and execute on the plan. Unfortunately, many people associate planning with start-ups. As a CEO or owner of a small or mid-size business, can you afford not to plan? Do you prioritize, focus and manage your growth proactively? Are you wasting time and money due to lack of planning or are you achieving your goals on time and optimizing your sales, profits and the value of your business.


Benefits of Planning


Guide Your Growth
Your business will grow or not depending on many factors, including overall economic trends, size of your industry, growth of your industry, specific market needs, sales strategy, marketing, hard work and other factors. Businesses that plan do it to guide and accelerate their growth so they consistently move towards defined objectives rather than just reacting to business events.


Manage Priorities
Managing people involves focus and constantly managing priorities. Allocate resources where they will generate the most profit. Work towards your strengths and away from your weaknesses. Grow the company by doing the most important things according to your current needs and long-term objectives.


Assign Responsibilities
A plan gives you a place to develop organizational responsibilities. Accountability drives businesses forward. Assign tasks and projects that achieve your goals and hold your people accountable.


Track Progress
With a written plan, you can track your progress towards goals, measure results, and better manage the business. Without a plan, how do you tell whether or not you are moving in the right direction or measure success? Use a dashboard style reporting to track key metrics in your business.


Strategy
Strategy involves taking a hard look at your products and services, your core competencies, your target markets, geographic sales coverage, your customers, pricing, operations, sales and marketing. Bring in the needed expertise to ensure your strategy yields success.


Specific Responsibilities, Goals, Tasks, Deadlines and Budgets
We call these milestones. These key aspects of business planning are critical to business success. Effective management of your people coupled with time management will yield higher profits and company value.


Financial Forecast
One of the most important aspects of strategic planning is the financial forecast. A business needs to set financial goals and targets to truly measure its success and drive the business forward. Without a monthly forecast you will never optimize your business and you will settle each month on results of the past.


CEO Advisor, Inc. has the expertise, coupled with hands-on advice to help you plan, strategize, grow and succeedContact Mark Hartsell, MBA, CEO of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.

Testimonial  


"As a President of a mid-size technology company, I have been very pleased with the services provided by CEO Advisor®. He contributed in many areas, but identified marketing and sales as our primary need. His guidance and contributions have been invaluable in establishing and maintaining a meaningful marketing and sales program for the company. He is a knowledgeable business advisor and a pleasure to work with."
CEO/President, Engineering Services/Manufacturing Company

"I highly recommend Mark Hartsell, CEO of CEO Advisor, Inc. Mark and I rebuilt my management consulting business and, in all honesty, I couldn't have done it myself: incorporating, marketing plans, sales coaching, prospective client lists and a dozen other tasks - all in less than six months. He was easy to work with, supportive, and perhaps most importantly, he had workable, practical answers to my business questions and problems that flowed from his broad business experience."


CEO, Energy and Environmental Consulting Firm



"Mark Hartsell and CEO Advisor, Inc. provide a unique advisory service for CEOs. He not only tackles high level strategic issues to assist CEOs navigate through challenging times, but Mark also gets very involved in actually addressing important issues head-on by performing the work to achieve tangible results.


Whether it is growing a business to the next level, turning a distressed company around or preparing a company for an exit, Mark's firm, CEO Advisor, Inc, provides a broad range of services and Mark is there for the CEO every step of the way."

 


Partner

Haynes & Boone, LLP

Words of Wisdom


"A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether."

Roy H. Williams
Author


"Yesterday does not equal tomorrow. Forget the past and move towards your goals."

Tony Robbins
Motivational Speaker

"Yesterday does not equal tomorrow. Forget the past and move towards your goals."
Tony Robbins
Motivational Speaker
"Yesterday does not equal tomorrow. Forget the past and move towards your goals."
Tony Robbins
Motivational Speaker



Prime Minister of the U.K.