From the course: Mergers & Acquisitions
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Identify sources of value
From the course: Mergers & Acquisitions
Identify sources of value
- There are many sources of value you can tap into during an acquisition. There might be revenue synergies. You can sell your products through the acquired company's channels or to their customers. And it can work in the other direction too. One company I worked for bought a retail chain. It gave us immediate access to a large customer base that we didn't have access to previously. We generated a lot more revenue selling our existing products through that new channel. There may be revenue synergies just from even entering a new geography. There may be cost savings. Merged entities typically have redundant functions. You don't need two finance teams, two legal teams, two corporate offices, etc. You might also have redundant facilities and plants that you can shut down. There may also be cost efficiencies possible if you have underutilized plants. They're not full, your lines aren't running all the time. But now you can fill those lines with the additional volume from the acquired…
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