- Overview of Mergers & Acquisitions
- M&A: Earnings Per Share & The “Bootsrap” Effect
- Industry Lifecycle Phase and M&A
- Pre-Offer Defense Takeover Mechanisms
- Post-Offer Defense Takeover Mechanisms
- Herfindahl-Hirschman Index (HHI)
- Valuing Target Companies
- Merger Gains to Shareholders & Post Merger Valuation
- Types of Restructuring
Industry Lifecycle Phase and M&A
M&A activity can vary depending on the acquirer and/or target’s phase in the industry lifecycle.
- Pioneering Phase: start-up founders may opt to “cash out” of their promising ventures by selling to larger companies that are seeking growth opportunities. Horizontal and conglomerate mergers.
- Accelerating Growth Phase: highly profitable and fast growing companies in new industries may sell themselves to more established companies in order to access capital for business expansion. Horizontal and conglomerate mergers.
- Mature Growth Phase: larger companies with slowing growth rates may look for targets with value potential or targets that can facilitate economies of scale. Horizontal and vertical mergers.
- Industry Maturity Phase: an acquiring company is now growing around the same pace as that of the economy; it will look for targets that can increase economies of scale or invest in small growing concerns that provide return opportunities for shareholders. Horizontal mergers.
- Decline Phase: overall industry is shrinking; an acquirer may look for synergies, to buy profitability of younger firms, or to simply survive. Horizontal, conglomerate, and/or vertical mergers.