Acquisitive Growth – Workshop 11 (Confirm Target)
The Appleton Greene Corporate Training Program (CTP) for Acquisitive Growth is provided by Mr Chicles Certified Learning Provider (CLP). Program Specifications: Monthly cost USD$2,500.00; Monthly Workshops 6 hours; Monthly Support 4 hours; Program Duration 12 months; Program orders subject to ongoing availability.
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Learning Provider Profile
Mr Chicles is an approved Certified Learning Provider (CLP) at Appleton Greene who is a business leader and strategist with broad experience in the global multi-industrial, aerospace and defense sectors. He is a seasoned operational leader of global industrial businesses, leading transformational strategies in highly competitive markets.
As a senior, C-suite strategist for multiple major industrial corporations he has led multiple mergers, acquisitions, divestitures and restructurings, as well as corporate break-ups and spin-offs. He has a distinguished track record of successful transformations of complex organizations in dynamic and uncertain market conditions while engendering the trust and buy-in of employees, customers, vendors, owners, corporate leadership and boards of directors.
A highly engaged leader at the personal and team level he has demonstrated the ability to engender effective senior teams and boards. He’s also an active mentor, teacher and community leader.
Mr Chicles is an active board member with AES Seals, global leader in sustainable reliability engineering, and Micro Technologies Inc, an electronics and advanced manufacturing company. He is a principal partner with ProOrbis Enterprises®, a management science consultancy with premier clients such as the US Navy and PwC, as well as the principal of Xiphos Associates™, a management and M&A advisory. Recently, he served as Board Director and Chairman of Global Business Development with Hydro Inc. the largest independent pump and flow systems engineering services provider in the world.
He was President of ITT’s Industrial Process / Goulds Pumps business segment a global manufacturer of industrial pumps, valves, monitoring and control systems, and aftermarket services for numerous industries with $1.2 billion in revenue, 3,500 employees and 34 facilities in 17 countries. Preceding this role he served as Executive Vice President of ITT Corporation overseeing the creation of a newly conceived ITT Inc. following the break-up of the former ITT Corporation to establish its strategy and corporate functions such as HR, communications, IT and M&A, building the capabilities, policies and organizations for each.
He joined ITT Corporation’s executive committee as its strategy chief in 2006 and instituted disciplined strategic planning processes and developed robust acquisition pipelines to respond to rapidly changing markets. Created successful spin-offs of 2 new public corporations Exelis Inc. and Xylem Inc. ITT Corporation was named one of “America’s Most Respected Corporations” by Forbes for exemplary management and performance during his tenure there.
Before joining ITT, Mr Chicles served as Vice President of Corporate Business Development and head of mergers and acquisitions for American Standard / Trane Companies, where he initiated and closed numerous transactions and equity restructurings globally.
Additionally, he created and led the corporate real estate function which entailed more than 275 real estate transactions around the world.
He began his career at Owens Corning rising through the ranks in various operational roles to Vice President of Corporate Development.
Recently, he taught advanced enterprise strategy at Stevens Institute of Technology as an adjunct professor and still supports start-ups through the Stevens Venture Center. He continues to be active as the Founding Board Member with several successful start-up technology businesses and non-profit organizations. A community leader, Mr Chicles has held the role of President of the Greek Orthodox Cathedral in Tenafly, N.J., He also led trips abroad to Cambodia and Costa Rica to build sustainable clean-water solutions and affordable housing.
His formal education includes earning a Masters of Business Administration from The Wharton School at the University of Pennsylvania, and a Bachelors in Finance from Miami University.
MOST Analysis
Mission Statement
Confirm Target – Assuming initial contact and conversations go well, the acquirer asks the target company to provide substantial information (current financials, etc.) that will enable the acquirer to further evaluate the target, both as a business on its own and as a suitable acquisition target. After producing several valuation models of the target company, the acquirer should have sufficient information to enable it to construct a reasonable offer; Once the initial offer has been presented, the two companies can negotiate terms in more detail.
Objectives
01. Non-Auction- Term Sheets: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Non-Auction- Valuation; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Non-Auction- Focus for Due Diligence; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Non-Auction- Meeting the Management Team; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Non-Auction- Site/Operational Visits; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Non-Auction- Managing the Advisors; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Auction- Phase I DD – The Data Room: departmental SWOT analysis; strategy research & development. 1 Month
08. Auction- Management Presentation: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Auction- Focused Due Diligence items: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Auction- Management Presentations and Operational/site visits: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Auction- Phase II Offer: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Auction- Advisor Management: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
Strategies
01. Non-Auction- Term Sheets: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Non-Auction- Valuation: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Non-Auction- Focus for Due Diligence: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Non-Auction- Meeting the Management Team: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Non-Auction- Site/Operational Visits: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Non-Auction- Managing the Advisors: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Auction-Phase I DD – The Data Room: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Auction- Management Presentation: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Auction- Focused Due Diligence items: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Auction- Management Presentations and Operational/site visits: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Auction- Phase II Offer: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Auction- Advisor Management: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
Tasks
01. Create a task on your calendar, to be completed within the next month, to analyse Non-Auction- Term Sheets.
02. Create a task on your calendar, to be completed within the next month, to analyse Non-Auction- Valuation.
03. Create a task on your calendar, to be completed within the next month, to analyse Non-Auction- Focus for Due Diligence.
04. Create a task on your calendar, to be completed within the next month, to analyse Non-Auction- Meeting the Management Team.
05. Create a task on your calendar, to be completed within the next month, to analyze Non-Auction- Site/Operational Visits.
06. Create a task on your calendar, to be completed within the next month, to analyse Non-Auction- Managing the Advisors.
07. Create a task on your calendar, to be completed within the next month, to analyse Auction-Phase I DD – The Data Room.
08. Create a task on your calendar, to be completed within the next month, to analyse Auction- Management Presentation.
09. Create a task on your calendar, to be completed within the next month, to analyze Auction-Focused Due Diligence items.
10. Create a task on your calendar, to be completed within the next month, to analyse Auction- Management Presentations and Operational/site visits.
11. Create a task on your calendar, to be completed within the next month, to analyse Auction-Phase II Offer.
12. Create a task on your calendar, to be completed within the next month, to analyse Auction- Advisor Management.
Introduction
Recap
Let’s recap the key concepts from the two courses completed on cultivation in the context of acquisitive growth, focusing on non-auction and organized process:
Cultivation in the Context of Acquisitive Growth:
1. Non-Auction Process:
• Definition: Non-auction processes involve direct negotiations and discussions between the acquiring and target companies without a competitive bidding scenario.
• Characteristics: The acquirer typically approaches the target privately, and the negotiations are more personalized and tailored.
• Advantages: Allows for a more strategic and collaborative approach, potential for confidentiality, and the possibility of reaching a mutually beneficial agreement.
2. Organized Process:
• Definition: An organized process involves a structured and systematic approach to identify and pursue potential acquisition targets. This often includes utilizing intermediaries like investment bankers or advisors.
• Characteristics: A more formalized method that may include a rigorous screening process, due diligence, and clear criteria for selecting suitable targets.
• Advantages: Provides a disciplined framework for evaluating and pursuing acquisitions, enhances efficiency, and may attract a broader range of potential targets.
Confirming the Target in Acquisitive Growth:
Now, let’s explore the concept of confirming the target in the context of both non-auction and organized processes:
1. Non-Auction Process:
• Approach: In a non-auction scenario, confirming the target involves deepening the negotiation process, clarifying terms, and ensuring both parties are aligned on the terms of the acquisition.
• Considerations: Emphasize confidentiality, address any concerns the target may have, and work towards establishing a trusting relationship.
2. Organized Process:
• Approach: Confirming the target in an organized process involves validating the findings from due diligence, ensuring that the strategic objectives align, and addressing any outstanding issues or concerns.
• Considerations: Collaborate with advisors and experts to thoroughly evaluate the target’s financial, legal, and operational aspects. Confirm that the acquisition aligns with the acquirer’s growth strategy.
Non-Auction vs. Auction Process:
• Non-Auction Process:
• Negotiation Focus: Direct negotiations with a single target company.
• Timing: Negotiations can be more flexible and tailored to the needs of both parties.
• Confidentiality: Easier to maintain confidentiality in the early stages.
• Auction Process:
• Negotiation Focus: Competitive bidding involving multiple potential acquirers.
• Timing: Typically follows a more structured timeline with defined bidding periods.
• Confidentiality: Can be challenging to maintain confidentiality due to multiple interested parties.
In summary, confirming the target in acquisitive growth involves validating and finalizing the terms and conditions of the acquisition. The approach may vary between non-auction and organized processes, but the goal remains to ensure a smooth and successful integration that aligns with the acquirer’s strategic objectives.
Confirming the Target
Confirming the target in the context of acquisitive growth is a crucial step that involves validating and finalizing the terms and conditions of the acquisition. This process ensures that both the acquiring and target compan