Merger, Acquisition & Divestiture Transactions...

It's much easier and exciting to get married than divorced.

Restructuring a company's business model may be necessary to capitalize on hidden profit opportunities and proactively respond to changing economic times. Business restructuring has gotten a dirty reputation lately because most firms don't employ this strategy until a crisis ensues. Then, under the name of restructuring, jobs are slashed, products discontinued and business units sold as a one-time event.

Companies can prevent the pain and embarrassment of forced restructuring by keeping a watchful eye on the industry, market and customers. Without the pressure to just survive, business restructuring is a positive, long-term profit generating event rather than a slash and burn exercise.

Merger and Acquisition Integration

It's not about what goes wrong during an acquisition-it's about your company's ability to recover.

Most mergers and acquisitions fail to achieve the negotiated revenue, market share and profit increases, according to recent studies. Principally, this failure is caused by poor planning and execution of integration activities not negotiating the price or deal terms. We all know about the biggest failures because the hit the media very quickly and loudly.

The good news is these integration failures are preventable with the proper planning and practice. Buying or merging with another company isn't like buying a new piece of technology off the shelf that's ready to go.

Integrating two or more business entities with different processes, redundancies, and disparate cultures is difficult and mistakes should be expected. Tough decisions need to be made quickly without the benefit of perfect information. At the same time, executives are busy reassuring customers and prospects that it's not only business as usual but it will be better. The Adare Group helps your company keep all these balls in the air and makes sure all the balls fall into place so profit forecasts are met.

The Situation:

A single product company decides to buy into a new market versus growing organically. The market dynamics are much less stable than in the original market and the acquired company needs to make decisions quickly. This newly acquired company has a supercharged culture and is used to moving quickly.

The Problem:

• Acquiring company is having difficult with the diverse corporate styles
• It's very tempting to "integrate" the uniqueness out of the acquired entity.
• Potential for destroying the value bought by changing the nature of the business.

The Solution:

• Research and know what you're getting into.
• Ready to accept new ways to do things given market needs.
• Start integration planning before negotiating even starts.

Business restructuring always involves change and that road can be difficult to navigate. We can help. We guarantee it! Here are a few examples of typical projects. Click below to learn more.

Strategic partnerships and alliances are a great way to spread the risk of a new venture. But strategic partnerships are much easier to get into than to exit from. A pre-planned exit strategy is the most important agreement in any partnership, joint venture or alliance. Also, deciding who the decision makers are is equally a sticky issue. Executives are accustomed to making all key business decisions and sharing this responsibility is difficult.

We offer 2 services to strategic partnerships:

1. Ensure the management structure is decided upfront so everyone can focus on key profit generating.
2. Assist strategic partnership executives navigate the murky waters so profit forecasts are realized.

The Situation:

To share the technology and financial risk, two energy companies formed a joint venture to explore for oil in the Gulf. Both have different production processes and approaches to the exploration project but didn't notice these differences until well after the papers were signed. Both partners are "in-charge."

The Problem:

• Valid reason for partnership.
• Easy to get married, living together takes works.
• Management by committee requires consensus and dilutes a competitive edge.

The Solution:

• Write the exit plan before sign the partnership papers.
• Define who's in charge.
• Make sure operating people get to know each other rather than just the legal negotiators.
• Put a clear definition of success in writing, including a dispute resolution process.
• Include a process for determining next steps as economic conditions change.

No decision is more distracting and uses up more resources than a bad decision. Great implementation can correct many mistakes.

Once a company has completed a customer and product segment analysis and has identified the under-performing assets or divisions, it's time to design and implement a divestiture plan. To maximize the sales price and the resulting gain not only takes knowledge of the market place but also practice…knowing what pitfalls to avoid and how to take advantage of hidden opportunities.

Divestiture implementation is the hard part and it takes practice. Most companies don't do this activity often enough to develop the necessary skills in-house. We can help. The Adare Group can quickly design and assist companies in the implementation of divesting assets or total divisions. Also, through our numerous contacts in the corporate sector, we can help you find potential buyers and close the deal.

The Situation:

A company identified a division that needed to be harvested. It's was taking a really long to decide to sell the division or just downsize it. And, this decision was distracting key people away from profit generating events.

The Problem:

• Giving up short-term revenue even if unprofitable.
• Asset or division was overvalued by seller
• Demanded an unrealistic sales price to generate a P&L gain

The Solution:

• To increase objectivity, separate divestiture process from normal business process
• Get objective appraisal of asset or divisions.

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For more information:
For more information on profitability consulting from The Adare Group, contact us at 630-399-7006, or info@TheAdareGroup.com to talk to one of our consultants.