Negotiating the M&A Deal: Building Blocks
Posted by Enrique Brito in M&A, Negotiation on September 26, 2018
Negotiation is a critical skill in both our professional and personal life. Whether we are negotiating the purchase of a home, a salary raise or the sale of a business, negotiation skills play a pivotal role in the ultimate outcome. But like all skills, mastering negotiation involves understanding its fundamental building blocks and diligent practice […]
Improving Company Value: The Lean/Six Sigma Connection
Posted by Enrique Brito in Value Enhancement on June 6, 2018
The challenge for most companies is to grow value consistently through a combination of revenue growth, operating margin expansion and capital efficiency. However, this requires a coordinated effort at all levels of the organization guided by clear strategic objectives and a commitment to operating excellence. In turn, this enables the organization to manage the development […]
Value vs. Price: A Critical Distinction
Posted by Enrique Brito in Valuation on March 2, 2018
Price and value are fundamental building blocks in a market economy. Understanding their function and relationship dynamics provides both, the context to make informed decisions about transactions, and a strong foundation for building wealth.
Measuring Shareholder Value and the Effects on Corporate Strategy
Posted by Enrique Brito in Business Strategy on November 30, 2017
In the current business environment, “maximizing shareholder value” is often interpreted to mean focusing on the short term to meet Wall Street expectations rather than a long-term strategy for value creation. In fact, across most industries in the U.S. the bulk of corporate actions aimed at increasing shareholder value are closely tied to financial engineering […]
Value Erosion: Overcoming a Critical Integration Challenge
Posted by Enrique Brito in M&A, Value Enhancement on September 1, 2017
Integrating a business acquisition most often is a race against time. Even before the deal closes, the combination of uncertainties about jobs, the second-guessing of important investment decisions and project delays caused by distractions from the due diligence process begin to take a toll on the target’s operations, and consequently, on its value.
This article explores three specific actions that acquirers can implement to minimize value erosion in business acquisitions and ensure a successful transaction.
The Subtleties in M&A Multiples
Posted by Enrique Brito in M&A on May 3, 2017
Understanding the several drivers embedded in pricing multiples is key to successful transactions.
Using Mezzanine Debt to Finance Acquisitions
Posted by Enrique Brito in Funding, M&A on March 19, 2012
Mezzanine debt is capital layer below senior debt and above equity. Its use in an M&A transaction provides flexibility in the capital structure, increases debt capacity and reduces the amount of equity that is needed to close the deal. These are distinct advantages for both the lender as well as the borrower. In terms of […]
Measuring Shareholder Value
Posted by Enrique Brito in M&A, Valuation, Value Enhancement on February 23, 2012
The increasing threat of global competition and the shortening of technology lifecycles require fast strategic responses on the part of most business owners. Additionally, it is crucial to develop the discipline of focusing on the right financial metrics that can have a significant impact on the ability to enhance the business value. A large number […]
What Drives Valuation Multiples?
Posted by Enrique Brito in M&A, Valuation on January 24, 2012
Valuation multiples, such as the price-to-earnings ratio and EBITDA multiples, are useful financial metrics to estimate a company’s value based on relevant peers. In the case of the price-to-earnings ratio the result is equity value, whereas EBITDA multiples determine enterprise value. It is important to note, however, that valuation multiples do not occur in a […]
Creating a Marketable Business
Posted by Enrique Brito in M&A, Value Enhancement on January 15, 2012
For a prospective buyer, the value of a business is based on its potential to generate enough cash flows to enable the buyer to recuperate the original investment and realize a given rate of return. Of course, the business’ past performance will provide anecdotal evidence about the enterprise’s potential to generate the earnings necessary to […]
Author:
------------------- Enrique C. Brito -------------------
On Value 