Enterprise value is enhanced through profitable growth;
growth is accomplished both internally and
through acquisition.

Strategic acquisition of business enterprises can drive revenue and margin growth by increasing market share and reducing costs.

There are currently more buyers than sellers of attractive acquisition candidates:

• Multiple buyers lead to higher prices.
• Strategic buyers generally pay higher prices.
• Robust stock markets and low interest rates lead to higher prices.

The most attractive acquisition can be detrimental to overall value if the price is too high. Accordingly, a successful acquisition strategy:

• Tracks and filters the maximum number of opportunities
• Defines with a high degree of precision those opportunities that will most greatly enhance value
• Focuses resources to successfully acquire those opportunities at the right price.

The right price for an acquisition must be understood in terms of the acquisition's impact on value - not in terms of what the market is willing to pay:

• A company's strategic vision must be defined.
• A rigorous valuation model must be created to sort through opportunities based on their impact on overall value.
• The cost of an acquisition must be understood to be the price plus the cost of integration.
• The Hankin valuation models have a proven track record of creating consensus between both the buyer and the seller regarding price. These models greatly enhance our ability to close transactions.

Successful purchase of acquisition candidates can depend on many factors other than price:

• The seller's non-price decision drivers need to be understood and addressed.
• A third party is more likely to close a transaction.
• A third party is less likely to recommend an acquisition at a price that neutralizes its positive impact on value.
• Resources should be dedicated to only those opportunities with a high probability of closing.

The Hankin system for maximizing value with a strategic acquisition strategy:

• Defines the company's strategic vision and the universe of attractive acquisitions.
• Creates a rigorous valuation model that determines the impact of any particular acquisition on value.
• Filters a larger number of potential acquisitions based on the above model.
• Focuses resources on only those acquisitions that will have the optimal impact on value and a high probability of closing.
• Understands non-price variables to minimize cost and maximize value.
• A preliminary price target is selected - "go/no-go" decision is determined for each potential candidate.

The Hankin system ensures the maximum value from an acquisition while minimizing risk:

• We go straight to an agreement in principle.
• Due diligence is exacting, efficient, and quickly discovers deal breakers.
• We locate financing, if necessary, available to close a transaction.
• We design an appropriate transition plan.
• We manage the deal through closing and provide aftercare if there are any unsatisfied conditions.
• We design transactions appropriate to future uncertainties.

Should a single seller be identified and desired, we customize our system to the circumstances to ensure least price and best terms under the circumstances.

Telephone  (310) 556-4422     Fax  (310) 276-9414