This post was contributed by Capstone Senior Vice President Wes Teague: Lockheed Martin (LM), one of the country’s largest government contractors, recently announced its intention to sell or spin off one of its oldest and profitable units, the Enterprise Integration Group.  The EIG,  a unit of LM for 42 years and with revenues of over […]

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Private equity fundraising from 82 closed funds totaled only $41 Billion in the second quarter – the lowest level since 2003, according to the Private Equity Professional Digest. This is important news for strategic buyers because it continues to demonstrate that financial buyers will remain limited in their M&A activity – but that the clock […]

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Negotiations, whether between individuals, businesses or even countries are nothing more than a process in which concerned parties come to an agreement that serves everyone’s best interests. Instead of one dominating or imposing power over the other, the parties attempt to reach a consensus in which everyone is satisfied. When preparing to negotiate you need […]

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Caterpillar announced it is acquiring Electro-Motive Diesel for $820 Million.  The company, which has revenues of about $1.8 billion is currently owned by two private equity firms who acquired it from General Motors in 2005 for around $200 million (read my other post about PE divesting before tax rates increase). Caterpillar already owns a railcar […]

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Congress is close to taxing “carried-interest” income on fund managers at 30% in 2011 from the current 15% capital gains rate. The rate is likely to go to 33% in 2013.  Congress may exclude the first 25% of income from this higher tax rate (which doesn’t really make sense to me) but the real story […]

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Tuesday’s Wall Street Journal had an article about how poorly large private equity deals have performed.   No wonder.  What value do they bring to the company?  Stripping off and selling key assets, re- re-leveraging the balance sheet.   How does this financial engineering grow or improve a company? Well, maybe some financial discipline is needed.  But […]

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Nothing like today’s considerable drop in the market to remind everyone that the economy remains on shaky ground.  I stand by my past prediction that the market will not improve dramatically for another 12 months. This turmoil does two things.  It makes sellers more fearful that the bottom could fall out again and it may […]

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H-P is acquiring Palm for $1B and they say it is to position them further into the smartphone market which reportedly grew by over 60% last year.  H-P’s head of strategy, Shane Robison said “It’s an opportunity for us to get into a very big market”.   Understandable?  It is to me.  I’m not saying it’s […]

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Although it almost dipped back below today, the Dow broke the 11,000 mark earlier this week.  This psychological barrier will impact the M&A market since there is a strong correlation between the equities market and M&A, with M&A lagging a bit. I continue to expect an increase in deal making, with the biggest growth to […]

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Cerberus Capital Management agreed to acquire DynCorp for $1 Billion on April 12.  DynCorp is a Virginia-based defense contractor who focuses on low-technology, high people-centric government contracts in hostile areas like Afghanistan.  Cerberus, probably best known for its acquisition of Chrysler, sees this as a way to expand its government business. There were four things […]

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PWC reported recently that 46% of CEO’s in their survey indicate they plan to sell their company, and of these 66% said they plan to sell within the next five years.  The primary reason cited in the report is to diversify and create liquidity. My experience with CEO’s of privately held firms is they typically […]

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Capstone Webinar: Finding Opportunity for Growth in Tough Times CPE Credit Awarded Thursday, April 8, 2010; 1:00 PM ET David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar. David will focus on where you can find opportunity for growth in the toughest economy in a generation.  His main […]

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I recently had the opportunity to drive over 1,500 miles over a five-day span throughout the southeastern US.  Two things stood out to me during my drive.  One was the number of shuttered motels, empty and fenced-in distribution centers, and vacant storefronts in small towns and strip centers.  All glaring examples of the on-going economic […]

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According to CFOs recently polled by Merrill Datasite, “87.1% of respondent are considering M&A activity as a means to grow.”   We at Capstone agree – the time is right to make a BOLD move – growing proactively through external growth.  Our clients are using acquisitions and investments to create a competitive advantage by adding capability […]

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I just spoke at the Wisconsin Institute of Certified Public Accountants Spring Conference and the general sentiment was cautious optimism for the next 12 months.  Several attendees mentioned they only see distressed companies selling and at 0.5x revenues.  Another mentioned his firm has lots of cash and no debt but they are hesitant to part […]

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Banks are still not lending much these days and last year  had their sharpest decline in lending in 67 years.  A friend who is a Vice President at a major US bank recently told me: “We have lots of money to lend, just no one that we want to lend it to.”   So how […]

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Clients always want to know how  we can quickly understand the perspective of the owner of the acquisition target.  Over the past 15 years focusing on the privately-held, not-for-sale space, we have a 98% success rate getting our clients in meaningful conversations and meetings with companies that are deemed to be a strategic fit. The […]

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A recent New York Times article, “How to Sell Your Business” provided some excellent advice about how to sell your own business. It recommended assembling “a team of professionals..an attorney and an accountant that you trust”. This is good counsel and should be followed by anyone selling, or buying, a business. However, the article also […]

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On this blog previously, David discussed some of the issues surrounding the AOL-Time Warner merger.  Given that the ten year anniversary of the merger was recently marked, I wanted to re-visit the ill-fated deal to explore it a little more in-depth. AOL and Time Warner merged to create the “world’s first Internet-age media and communications […]

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From my recent experience working with middle-market companies, I would have to agree with this article that states that there were an increasing number of divestitures by multinational corporations (MNC) in 2009.  In particular, my work in the specialty chemical industry showed me that the economic downturn has forced many MNC’s to reassess their portfolios. […]

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