Summary of Andrew Sherman's Mergers and Acquisitions from A to Z

By IRB Media

Please note: This is a companion version & not the original book.

Book Preview:#1 The typical means of growing a business are organic, inorganic, or by external means. Acquisitions, especially those that involve another company, are the most common way to grow a business.

#2 The decision to acquire or build is based on the long-term, sustainable value creation of a company's stakeholders. While growth may accelerate the achievement of these objectives, it also increases the risk if deals are not structured and negotiated correctly.

#3 Mergers and acquisitions are two very different things. A merger is when two companies join together to create a new entity, while an acquisition is when a company pays another company to take control of its assets or shares.

#4 The current market cycle is characterized by a shift in the buyer’s market to the seller’s market. The factors that have led to this change in market dynamics are: a housing-led U. S. recession, overleveraged financial institutions, falling asset prices, frozen credit markets, and weak consumer household balance sheets.

• Language: English
• Publisher: IRB Media
• Release date: Feb 10, 2022
• ISBN: 9781669345640

IRB Media

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Insights on Andrew J. Sherman's Mergers and Acquisitions from A to Z

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 8

Insights from Chapter 9

Insights from Chapter 10

Insights from Chapter 11

Insights from Chapter 12

Insights from Chapter 13

Insights from Chapter 14

Insights from Chapter 15

Insights from Chapter 1

#1

The typical means of growing a business are organic, inorganic, or by external means. Acquisitions, especially those that involve another company, are the most common way to grow a business.

#2

The decision to acquire or build is based on the long-term, sustainable value creation of a company's stakeholders. While growth may accelerate the achievement of these objectives, it also increases the risk if deals are not structured and negotiated correctly.

#3

Mergers and acquisitions are two very different things. A merger is when two companies join together to create a new entity, while an acquisition is when a company pays another company to take control of its assets or shares.

#4

The current market cycle is characterized by a shift in the buyer’s market to the seller’s market. The factors that have led to this change in market dynamics are: a housing-led U. S. recession, overleveraged financial institutions, falling asset prices, frozen credit markets, and weak consumer household balance sheets.

#5

In many cases, mergers and acquisitions are being driven by a key trend or fad within a given industry. For example, in the high-tech industry, many of these deals are being driven by rapid technological change.

#6

The acquisition driver is based on the author’s opinion and is not necessarily based on facts and figures.

#7

Some MA deals are taking a new twist to an old page in the business book. For example, in 2009, three companies that were alike in nature and size transformed themselves into consulting- and services-oriented businesses: IBM with ACS, Hewlett-Packard with EDS, and Dell with Perot Systems.

#8

The tenth driver is synergy, which is the idea that the whole will be greater than the sum of its parts. This is the underlying principle behind mergers and acquisitions. However, the quest for synergy can be deceptive, and buyers must be careful to communicate with sellers to avoid a misunderstanding regarding what they’re buying and what they’re selling.

#9

In this chapter, we will examine the basic reasons why a buyer buys and a seller sells, and we will learn about the motivations of the other party in the transaction.

#10

The key motivators for both sellers and buyers are to gain access to cheaper labor, or to diversify into new lines of products or services.

#11

In a classic merger, there is no buyer or seller. One party may be the quarterbacking the transaction or have initiated the discussion.

Insights from Chapter 2

#1

Businesses, like any asset, are valuable. As with many things of value, there is a market for the trade of companies - a market where people with different expectations for the future will value the same company differently, enabling a buyer and seller to come to a mutually agreeable trade.

#2

Exit strategies and plans of action are crucial to safeguard the value of the business. The more time a seller puts