Mergers and Acquisitions
In today’s post we continue exploring the depths of the due diligence phase of purchasing a business. We’ve already discussed the financial issues and the legal issues, and today we’ll look at the operational issues surrounding due diligence. We’ve highlighted four important questions to answer regarding operational issues of a business you’re looking to purchase.
What products or services does the company offer?
It may seem like a no-brainer to most, but it is important to acquire an in-depth knowledge of… Read the rest
In last week’s post we discussed the legal issues surrounding due diligence. This week we continue our Purchase and Sale of a Business series by discussing some essential financial issues to consider during the due diligence phase of purchasing a business.
Avoid a Headache; Know the Financials In and Out
The last thing you want to do is purchase a company with disorganized books and a lack of financial records. Not only will you spend time and money sorting out the books and reconciling the… Read the rest
In the introduction to due diligence, we explained the importance of engaging in extensive due diligence prior to purchasing a business, and we broke down due diligence into six categories. Today’s post will highlight the key legal issues the purchaser should be aware of when purchasing a business.
Reviewing the Owner’s Governing Documents
Prior to any acquisition, the purchaser will need to know the basic organizational structure of the business, i.e. how it was formed, its governing documents, and its key personnel. Knowing how the business is organized will dictate how the transaction… Read the rest
“By failing to prepare you are preparing to fail.” This quote by the great Benjamin Franklin is a helpful point of reference for understanding why due diligence is so important in the purchase and sale of a business. The buyer needs to make sure he or she knows exactly what he or she is purchasing. Due diligence offers the purchaser an opportunity to get to know the seller’s company and avoid being caught off guard by an undisclosed issue after the company is acquired. If the buyer fails to take advantage of the due diligence process it is very likely… Read the rest
Anheuser-Busch InBev NV’s $20.1 billion proposed takeover of Mexican beer distributor Grupo Modelo SAB has come to a halt after the Justice Department has filed suit to block the merger. This suit comes as part of a flurry of civil antitrust cases, signalling what many some believe to be the Obama administration’s increased willingness to intervene in the markets.
Currently there are seven antitrust cases in litigation, the most ever at one time. A spokeswoman for the Justice Department stated, “if the parties are not willing to offer a remedy or enter into a settlement that resolves our competitive concerns,… Read the rest
Mergers and Acquisitions
Avis Purchasing Zipcar for $500 Million
The Avis Budget Group announced Wednesday that it will purchase Zipcar for $500 million cash. The deal signals a new direction for Avis. The car rental industry has become more and more competitive with Hertz recently purchasing Dollar Thrifty, and several car rental companies jumping on the hourly rental bandwagon.
Avis is seeking to attract a younger, progressive market with its recent acquisition of Zipcar, as Zipcar members tend to be younger, more urban individuals as opposed to the traditional business or tourist market… Read the rest
International News
British Publisher to Purchase Share in Nook
Pearson, a British publisher and education company, made public its $89.5 million investment in Barnes & Noble’s Nook tablet. In exchange, Pearson will receive a 5% stake in the business. Barnes & Noble recently warned its shareholders that its e-reader business would fall short of its annual projections and that holiday sales are lower than expected.
In April, Microsoft invested $300 million in Nook. Together with Pearson’s investment, the Nook business is valued at $1.8… Read the rest
Securities Regulation
UBS Settles for $1.5 Billion
We reported last week about the Swiss banking giant’s proposed settlement with global authorities. Well, the settlement is now final. UBS agreed to pay $1.5 billion in fines to settle claims against it for a multi-year scheme to manipulate interest rates, so called “rate-rigging.”
This settlement is the largest to date related to rate-rigging. The fine is one of the biggest sanctions ever levied by both American and British authorities, falling just below the $1.9 billion settlement levied against HSBC last week over money laundering claims.
Mergers and Acquisitions
Knight… Read the rest
Mergers and Acquisitions
Sprint Offers $2.1 Billion for Clearwire
The mobile giant Sprint Nextel Corp. offered $2.1 billion to purchase the remaining 50 percent of Bellevue-based Clearwire Corp. Who owns the other 50 percent? Sprint.
Sprint is offering $2.90 per share to buy the 700 million outstanding shares, according to the SEC filing. As a result, Clearwire’s shares jumped during early trading, up 35 cents to $3.10. This offer comes just months after Sprint purchased Clearwire’s co-founder, Craig McCaw’s shares.
Best Buy Gives Founders More Time to… Read the rest
Regional News
Tully’s Selling Coffee Shops to Kachi for $4.3 Million
Tully’s Coffee Corp. has seen its ups and downs recently. The company filed for Chapter 11 bankruptcy protection in October, and announced Wednesday that it will sell its coffee shops in Washington and California to Kachi Partners, a Colorado-based entrepreneurial financial group. Kachi was one of 13 companies that expressed interest in purchasing Tully’s, and one of the 56 potential buyers that were contacted.
Subject to court approval, the acquisition will close by the end of December. Kachi… Read the rest
