Friendly acquisitions are as full of potential pitfalls as hostile ones. Is the management team up to the job? Will they be loyal to the new owners or, post-acquisition, are they likely to leave and become competitors?
In cross-border transactions the usual issues take on even greater significance. What are relations like between the company and its customers, its vendors and its labour force? How does the company stand in relation to off-balance sheet issues such as environmental practices and corporate governance? Bishop International undertakes discreet inquiries to enable you to negotiate in full knowledge of the facts.
We acted for a European company that intended to make an acquisition in the US. We evaluated the management team and the business. It was apparent that there were significant issues surrounding the judgement and management style of the chief executive. Our client restructured the acquisition accordingly and then successfully completed the transaction.
Bishop International acted for a UK listed company that intended to launch a hostile bid for another company in the same sector. The two companies had similar revenues. However, the client had head office costs of £5 million and the target company had head office costs of £30 million. Bishop was asked to explain the difference. We discovered a corporate jet that was secretly operated by the target as well as major overlaps in head office and regional office functions, which together accounted for most of the difference.
A US-based international financial services business was considering acquiring an Australian company that had developed a security technology. However, the sellers of the business were claiming a value that was difficult to substantiate. Bishop International undertook market inquiries that revealed the seller’s price to be a significant over-valuation of the business and enabled our client to negotiate from a position of strength.