Wrote a piece for The European Financial Review on why buy-and-build remains key to PE value creation.
3-point summary:
1) Acquisitions drive growth
2) Acquisitions help you get economies of scale / higher margins
3) Acquisitions help you benefit from multiple arbitrage (smaller assets are cheaper to buy)
There is also a con, which is acquisitions are often financed using debt. So higher debt service costs and a more risky business.
https://lnkd.in/dvA9Pj_4#pe#investors#buy#build
✍️16 Points about Corporate #Finance:
1-Finance, what to buy, where to get the #money to buy it, and how to manage it once you have it.
2-board #strategic focus:
- #inventory management.
- acquisitions.
- #borrowing policy.
- share buybacks.
- large institutional #investors.
3-👇👇👇
Curious about Leveraged Buyouts? 📈🔍📚
Discover the basics of financial strategy behind successful acquisitions in this engaging document, where i have shared the basics around the concepts.
Throughout this week, I will be providing insights into the concept of Leveraged Buyouts with recent and relevant examples.
I will also conduct valuations by creating LBO Models, which I'll share in the upcoming posts.
Stay tuned for valuable analysis and insights.🧑🏻🏫
Thank you! Follow to learn more.
💼 #Finance#LeveragedBuyouts#Acquisitions#FinancialAnalysis#LBO#FinanceEnthusiast#PrivateEquity#Valuations#Content#FinancialModelling
Economic downturns can significantly impact mergers and acquisitions, presenting both challenges and opportunities. During these periods, companies often face lower revenues and profitability, leading to decreased valuations. This can create opportunities for buyers to acquire assets at a lower cost, but it also brings about unique challenges.
Securing financing during an economic downturn can become more difficult as lenders tighten their credit standards. Additionally, sellers may be reluctant to accept lower valuations, resulting in longer negotiation periods. Companies must be diligent in their due diligence processes to identify potential risks and ensure they are making informed decisions.
Despite these challenges, economic downturns can be a strategic time for well-positioned companies to make acquisitions. By capitalizing on lower valuations and identifying synergies, businesses can strengthen their market position and emerge stronger when the economy recovers.
Understanding the dynamics of M&A during economic downturns is crucial for navigating these complex transactions effectively. Stay tuned as we explore strategies to leverage opportunities and mitigate risks during challenging times.
#DougMitchell#ScaleLLP#MandA#EconomicDownturn#BusinessStrategy#CorporateGrowth#StrategicAcquisitions#MarketDynamics#FinancialStrategy#BusinessOpportunities#RiskManagement
DISCLAIMER: THIS POST IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS, AND SHOULD NOT BE CONSTRUED AS, LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE OR COUNSEL OF ANY KIND.
Thank you for sharing your insights with us! Here's to hoping for another collaboration in the future.