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Strategic mergers offer results making the end user/owners more competitive in their industry as well as potentially increasing the utilization of the combined facilities or core staff.  Attempts at these combinations many times fail for a variety of reasons including:

  • The underlying assets making up the businesses to be combined contain assets of different ages with different values.
  • Management may or may not be effective and costs may not be accurately reflected.
  • Emotions may block success particularly where it is a family owned or closely held business.

These transactions require a thorough and complete analysis of each enterprise to determine its' value as well as the value of the combined entities, and as part of that analysis and investigation, forensic skills to make sure that the information presented by each of the parties to the combination is in reality as presented. One step, which many times is missed, is to make certain that the combined businesses will be more valuable as a unit in good times as well as bad.

Many times there is good-faith exploration of a merger between businesses but it seems impossible to agree on the value of a company or group of assets in the proposed combination.   At times, it may make sense to form a marketing joint venture, which allows some of the merger benefits and a trial marriage between the parties. 

We are often able to work through the details and bring both parties together while respecting the needs to each party. Call us for an informal introduction!

 

 
   
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