Comments on: Missed Expectations and The Eighty Percent Acquisition Rule

By: Russ Gartner

Russ Gartner — Fri, 11 Jan 2019 17:52:47 +0000

I have another objective point here as I am currently trying to penetrate other markets and require physical locations. Just recently my team cancelled a land contract due to “impact fees” which were going to set our project over budget by $80,000. We’ve been subject to (seemingly) random “use tax” and “personal property tax” bills that arrive in the mailbox. My first endeavor to get my facility up and running took 11 months in the permit process (all the while paying debt service), and over $186,000 of un-fanciable expenses…banks don’t loan money on $7,000 fire extinguishers! One very valid reason to buy existing structures and/or businesses in my opinion is that these facilities are grandfathered in. Having some certainty on closing day when dealing with the uncertainty of local and state governments saves a lot of money and grey hair. Thank you Mr Berkus!

By: John Harbison

John Harbison — Wed, 09 Jan 2019 18:41:59 +0000

Back when I was a consultant, we did a lot of benchmarking on outcomes and best practices in alliances and acquisition, as well as post merger integration. Cisco was one of the companies that excelled at acquisitions. One curious finding was that the companies that were best at alliance (Corning and HP) were terrible at acquisitions. The reverse was also true.i never encountered any company that was good at both.

By: Michael O'Daniel

Michael O'Daniel — Wed, 09 Jan 2019 07:21:15 +0000

Any time there’s a merger or an acquisition, change management comes into play. Unless you have extremely strong change management capability in-house — or even if you do — that’s a good time to bring in a third-party change management resource to help smooth out the transition. And bring them on well in advance of the integration, not after it’s already begun and the red flags are popping up.

By: Dave Berkus

Dave Berkus — Tue, 08 Jan 2019 19:51:49 +0000

In reply to Gene Siciliano.

Gene,
Yes, the email intro referred to the headline below, the “80% rule” as you guessed. Sorry if it was not clear in the email intro paragraph.

Dave

By: Gene Siciliano

Gene Siciliano — Tue, 08 Jan 2019 19:00:17 +0000

This part of your email intrigued me, because this hits my sandbox:
“Especially for selling entrepreneurs or senior managers, this one probably hits home. The buyer quickly moves to combine accounting, senior management and sales to obtain cost savings and uniformity, usually to the consternation of executives remaining with the seller. Here is one rule to help you set expectations…”
Couldn’t find the “rule.” If that was a reference to your 80% rule, the connection escaped me.