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SMMCG6[CS-2]LN9&LN12 Corporate Transactions, 圖片1 - Coggle Diagram
SMMC
G6
[CS-2]LN9&LN12 Corporate Transactions
Brett Conradt Interview
Stax Consulting
Global management consulting firm
Chicago
Serving corporate and private equity firms across a broad range of industries
Acquiring process and deciding targer firms
Investment standpoint
Investment bank
Management team
Private equity fund
Market size
Market growth
Competitive positioning
Different growth opportunities
The macro view to look at where the capital is coming from
Insurance companies
Pension funds
End up driving some of the growth in those investments
Impacts to faculty, features and people outside of the business world
Create value from the acquisition
The management team vision for how to grow their business
Deeply understand
opportunities
Size of those opportunities versus
Hypothetical or theoretical
Statement of how the value is going to be created
Private equity fund side
Having vision of where there's value creation and where it's possible
Advice
Taking things at face value
Acknowledge those highlights, but then to also dig for the opportunities for improvement
Identify some of those opportunities for growth
Pressure testing to make sure the right
Disney case
Animated icon economics
Lucrative, profitable
Can fully owned characters
Makes a lot of money outside the initial release.
E.g: home video rental, streaming, TV, merchandise, video games, theme parks, shows, electronic use of characters, co-branding
Sequels often outsell original
Orchestrate this enterprise across multiple channels and overtime
Complementary assets
Explicit design of Disney's corporate strategy
Disney's corporate strategy 1950s
Influenced by Walt Disney's way of looking at things
Has a slightly changed in 1960s
Essentially monetizing its core animation characters and stories
Roy Disney in 1971
Meandered and went into a prolonged slump
Unable to really find its way or develop new exciting movies
Under Michael Eisner
/Disney Renaissance/
Brought Katzenberg with him to take charge of Disney's motion picture division
Famous movies: The Little Mermaid, Beauty and the Beast, Aladdin, and the
Lion King
"represented something of a high watermark "
Katzenberg left Disney in 1994 to start DreamWorks
Pixar
combining high tech advances with compelling storytelling and on-screen artistry
Close alliance with Disney
most of Disney's hits were actually Pixar movies, Monsters Inc., Finding Nemo, Cars, The Incredibles
Acquired in 2006
Release movies exclusively from 1995 - 2003
2009
Disney bought out Marvel Studios,
2012
Disney even bought Lucasfilm and it's Star Wars franchise
Divestitures
Corporate Divestiture
a transaction breaks up and seperate a business unit from a company
Not selling assests
Divestiture Modes
Spin off: Seperation of business - shares are distributed
Carve out: Partial sale of a business unit's share to investors
Characteristics: small-sized and high speed
Why divest a business unit?
Raise cash for parent
Low profitability of unit
Reduce risk or liability
Lack of strategic fit (low synergies)
Refocus on core business
Free up and redeploy resources
Remarkable at Innovation
GUI, ethernet, internet, laser printer, bitmap
Divestiture and Xerox PARC?
35 projects spun off from Xerox PARC
11 succeeded: combined market value 2x of Xerox
How to manage it?
Be open to divesting units
Be clear about goals, identify right divestiture mode
Strategic Alliances
Types of Strategic Alliances
Relational contract- long term
Licensing: contractual agreement
Equity Alliance
Joint Venture
Why firms do strategic alliances?
Accessing capabilities
Reducing asset
Learning form partner
Sharing costs and risks
Building cooperation
Example: Microsoft- AT & T Alliance
Problems with Strategic Alliances
Competitors gain access to capability
Managing joint investment, risks and responses
Conflict, oppportunism, disputes
Adverse selection problems (partners, contribution)
Moral hazard (monitoring)
Partner Selection
create value, seek different benefits
contribute valuable assets to the alliance
accept a fair distribution of benefits
Alliance Structure
Contractual terms
purchase/supply terms, milestones
Credible commitments
equity stakes, sunk investments, exclusivity
Managing Alliances
Build and reinforce trust
Learn from your partner
Adapt structure and management over time
Mergers and Acquisitions
Merge
Combine two companies that are roughly of a similar standing, usually in size or in valuation, and having a friendly approach to the transaction.
Example of friendly merger
The Amazon Whole Food merger
Acquisition
It tends to be outright purchases and takeover of another company, which can be friendly or unfriendly.
Example of unfriendly acquisition
Singapore based Broadcom made $117 billion unsolicited offer to buy US tech company Qualcomm.
Usually can not create value
M&A often lower the acquirer's stock price
The inability to actually integrate the two companies and realize synergies that were presumed to exist.
Why the company acquire
Company may do merges and acquisitions to get into new market or to get access to new technology and capabilities .
Some companies may also engage in M&A because they have very well honed acquisition and integration capabilities.
Managers do M&A
They do M&A not necessarily in the best interests of the company or its shareholders,but in their own personal interest.
Increasing diversification and reduce the overall risk of the company.
They are overconfident to do the merge.
The risk of M&A
The efficient market wall is part of the general problem that companies can end up overpaying for targets
Winner's curse
Pay too much for target
How to create value
Create synergies
Stretching stratrgy
Leveraging strategy
Most important things on M&A
We should Focus on evaluating the target, ensuring the synergies are there, planning for post-merge integration, and executing the integration plans
Summary
Acquisition increase market power
lower risk compared to developing the new products yourself
avoiding excessive competition, once again that can lower cost
Bring in another organization
a different culture
be very carefully orchestrated to make sure that people feel they're going to be empowered in the new organization
Asymmetric information problems
put the acquiring firm in a higher debt ratio
even though they have good projects, they can't get the external capital markets to support those ventures that they have
Synergies don't materialize
growing too fast, diversifying too fast, at some point your profitability on that y-axis starts to go down
Jamie Cleghorn Interview
Elements of value framework
Companies exist to create customer value
Customers and value or a value proposition is actually discrete and measurable and can bring management science to it in a way that should be able to bring to running a factor
How to use it in company?
sort A (the reflection
of Maslow's hirechy
Give people to think about
where value comes from different context.
Be the most enduring way to create winning strategy
What should focus on in changing
Communicate
Sure volume dramatically outside of normal
Create the vision
that point of arrival
vision
Let people get excited
How to create lasting changing
Get every person want to change
Give them tool、data and time to internalize the reason
Corporate strategy
The pursuit of competitive advantage to the configuration and coordination
of a company's multi-business activities
Corporate transactions involve actions with other entities that change or manage the scope of the firm
Companies can grow new businesses organically
From within or exit businesses by redeploying the assets and resources from that business.
Reference material
Annual BCG M&A Report
IMAA or the Institute for Mergers,
A Portfolio View
:one: learning and capability augmentation over time through corporate transactions
:two: to hire the employees and founders
Android, which was a separate company in 2005
Most of Android's key employees moved over to work for Google
Google formed various alliances to manufacture its own version of an Android phone
handset companies
to commercialize Android
bought Motorola and then divested most of Motorola to focus elsewhere
A real option
company may obtain for itself the option, but not necessarily the commitment
It starts out with a small investment and then the investments increase to a higher level
to acquire a number of targets in the same industry
&
seek to combine them to exploit scale and leverage synergies
be helpful in aggregating and
funneling valuable information
