M & A:
To Add Value, Pay Cash, Go Hostile

Man with boxing gloves

To create value in Mergers and Acquisitions, take the gloves off

In the first solid research we’ve seen regarding the value created from Mergers and Acquisitions, the conclusion is that the winners are big winners and offset the losers.. The data that is commonly quoted is that 70% of acquisitions provide negative returns to stockholders. But that data goes back to the 1980’s, and does not account for the huge winners. It is equivalent to the private equity fund strategy: the big winners offset the losses of the losers which can make up the majority of acquisitions. That is also very much the way Venture Capital works.  The perception that up to 70% of mergers and acquisitions destroy value is out of date, according to a U.K. study which was commissioned over the furor of Cadberry by Kraft Foods, which was, by the way, a bad idea, as evidenced by the subsequent split of the two companies in October 2012. To learn more, contact us

 



by Charles Smith

Mr. Smith is the founder of Pegasus Intellectual Capital Solutions, a boutique investment bank specializing in mergers and acquisitions, Capital Raising and restructuring and workouts. The firm is an innovator in the use of Intellectual Capital Audit for pre-closing due diligence and in turnarounds. Charles can be reached at csmith@pegasusics.com