Contributing Member of the Accounting & Financial Analysis Councils

All News Analyses by this Author

How bad will EMEA troubles continue

October 27, 2009

Analysis of:Survey Predicts European Troubles | www.mergersunleashed.com

Sweeping statements about economic expectations can hinder recovery efforts. While some sector is Europe (and the US) continue to show little signs of recovery, many other sectors are improving. If those sectors such as real estate and auto industries were to be removed from the prediction, I wonder what the survey results would show.

When should the leader of a startup be replaced

October 16, 2009

Analysis of:Integrated Diagnostics Launches With Pre-Eminent Team and Investors | www.vcaonline.com

The majority of the time a private company with a solid product in a growing market fails is because the wrong person is in charge of navigating the ship. As companies go through the phases from product design and development to profitability, the talent on the executive team needs to be reviewed to make sure the right people are in place. Industry experts typically start the company's operation, but they may have never run a company to IPO.

Knowing how the money will be spend is key to an equity raise

October 15, 2009

Analysis of:Ooyala Raises $10M to Fund Aggressive Expansion Plan | www.vcaonline.com

Preparing for an equity includes having a detailed strategy, solid talent, supportable forecast, and the thorough knowledge of how the equity raise will achieve the company's goals. Without completely thinking through how much money is needed and where the money will be invested causes doubt with the likelihood of success.

Preparing for an Equity Raise so VC's don't Rely on 'gut feeling'

October 1, 2009

Analysis of:Harris: Survey finds venture capitalists rely heavily on 'gut feelings' | www.mercurynews.com

As private equity firms are approached by companies seeking a capital infusion, the preparation work completed by the seeking company will most certainly help the VC determine whether they want to invest. Unfortunately most companies do not know how to prepare for an equity raise. Most will put together an investor package and maybe some forecast, but will fall short of providing supporting documents and a detailed forecast that's easily understood. Additionally, most small companies won't afford an investment banker to consult them, so they hit the road on their own.

Selling to Avoid Litigation

September 23, 2009

Analysis of:Marriages of Convenience | www.mergersunleashed.com

An acquisition strategy that is led through litigation is never a good tactic to take when a company is trying to expand. Key employees and corporate culture are sure to be lost, putting the success of integration at risk.

Expanding into New Markets Through M&A can be Tougher than Expected

September 21, 2009

Analysis of:Dell agrees to buy Perot Systems for about $3.9 billion | www.mercurynews.com

Size and compatibility and two factors and company should consider before going down the M&A road. Expanding quickly and in new areas are important factors to a successful company. The majority of the growth, however, should be organic. And the new product expansion should not be too far leaping. With the majority of acquisitions fail to meet ROI expectations, this is one purchase that needs careful thought on how to proceed.

A good recipe for equity raise and acquisitions

September 15, 2009

Analysis of:MedAssurant Buys Catalyst- Middle-market M&A is beginning to pick up after massive corporate mergers. | www.mergersunleashed.com

Many company approach an equity raise and/or acquisition strategy with little forethought and guidance. MedAssurant has provided us with a very good road-map for both.

Voluntary Governance is Much Better than Forced Governance

September 9, 2009

Analysis of:ILPA Issues Guidelines | www.mergersunleashed.com

VC and equity firms have recently come under pressure to change some of their practices. In the past, those that have incorporated self-governance to ward-off forced changes have found the new requirements to be more lenient and less costly.

Company Valuation- Art or Science

September 4, 2009

Analysis of:SEC Calls Brantley Execs to the Carpet | www.mergersunleashed.com

The practice of valuing companies has little guidance and much room for interpretation. If the SEC is going to start looking into how the private equity industry is formulating their calculations, GAAP must do a better job at defining the requirements.

The reasons for an Acquisition Aren't Always Apparent

September 1, 2009

Analysis of:eBay Inc. Signs Definitive Agreement to Sell Skype in Deal Valuing Communications Business at $2.75 Billion | news.moneycentral.msn.com

eBay just agreed to sell 65% of Skype to private investors. Because Skype has been around for several years and has not preformed as expected, we have to ask "why invest?"

Bank Acquisition Strategies Could be in Jeopardy

August 31, 2009

Analysis of:Bids For Failed Banks: A State Secret? | www.iddmagazine.com

With so many small banks finding it hard to survive in this market, it would seem the governing agency would do all within its power to find potential buyers for those unable to make the grade. With the recent change in valuation methods to a multiple calculation, comparable data is imperative in providing confidence to the bidding firm.

When is divesting a good idea

August 28, 2009

Analysis of:GE Rumored To Divest Security Unit | www.mergersunleashed.com

When selling a part of the business, the strategy that dictates this action should be either profitability or focus on core products. Another factor in the sale is who is the buying audience. Without taking these 3 factors into accounts, the sale make come back to haunt the seller one day.

Optimistic Views from Private Capital Sector

August 25, 2009

Analysis of:Pepperdine University National Study Shows Private Capital Providers Have Very High Expectation for Return on Investment | www.vcaonline.com

Key beliefs from private capital firms are at odds. While most believe the demand and activity of private equity will increase over the next 12 months, most also believe the restrictions on investments will increase and the economy will not improve. This opens the doors for a confused market that will most likely continue to wait on the sidelines for signs of improvement.

Hard Times for VC Firms

August 21, 2009

Analysis of:Venture capital industry sees glimmers of hope but is still in a deep slump | www.mercurynews.com

There's not much in the news about the health of FC firms. They are getting squeezed from low investment activity, reduced valuation on portfolio companies, and very little fund raising activity. Large public companies like IBM, Cisco, and Microsoft are turning a renewed eye towards monitoring private companies' health. The VC firms who are working with the pro-acquisition companies could be at an advantage when the clouds part.

Private market is peaking out from its shell

August 20, 2009

Analysis of:Investors eye top startups as IPO market awakens | www.reuters.com

While the public markets have shown signs of life, pressure is being placed on VC firms to invest and private companies in a position to go public. Don't expect too much activity until the economy improves.

Bank M&A and synergies

August 20, 2009

Analysis of:Barclays investors seal BGI deal | uk.reuters.com

Financial institution acquisitions are different from strategic purchases. For banks to acquire, they are looking to expand geographically . The synergies are typically overhead and overlap in costs. If the cuts are too deep, in this case pension, tension among the newly acquired personnel can get tight. This could cause a loss of business should employees decide to leave.

Investing in an exit strategy

August 18, 2009

Analysis of:Europe's buyout firms eye IPOs | uk.reuters.com

The IPO days from 20 years ago glamorized the industry. Having the power and punch to launch a successful IPO and realize a first day return is limited to a select few companies in this market. Private companies whose sole exit strategy is an IPO are setting the stage for risky investments.

Restructuring Wave

August 18, 2009

Analysis of:HIG Capital sees potential in European distress | uk.reuters.com

As the market looks to better days in the economy, VC firms are looking for ways to invest in the private sector. Replacing debt for those companies in a position to rebound is a strategy with many pluses, but unfortunately the field for candidates, both buyers and sellers, are very limited.

Don’t Hold your Breath for a Significant Up-tick in IPO Traffic

February 21, 2007

Analysis of:An IPO Resurgence? | www.cfo.com

This is the first article I’ve read in almost a year that actually mentions a positive outlook for US based IPO traffic. Besides using a limited number of references, where does this article fall short defending this idea?

Beware of oversized acquisitions (especially if its the market trend)

February 14, 2007

Analysis of:Market gives thumbs down to M & A's | www.businessstandard.com

Many factors contribute to market adjustments; inflation, FX rates, economic news. But in this case, specific items are pointed out that could be the cause of the correction. Investors are skeptical of acquisitions where the acquirer is smaller than the acquiree. When several such acquisitions take place, the market will sit-up and take notice. This article attempts to explain why this occurs, but fails to go deep into the potential pitfalls of oversized acquisitions.

 

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