Acquisitive Growth – Workshop 8 (Deal Approach)

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 24 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.

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MOST Analysis

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Mission Statement

The M&A landscape is becoming increasingly competitive and the balance of power is shifting further in favour of buyers. For attractive businesses, however, sellers may wish to make divestments through an auction process which is designed to elicit competitive bidding among interested parties to facilitate the sale of a business or stake in a company at the highest price and on the best possible terms. Not all transactions require collaboration between the buyer and the seller, however. In many instances, an auction is still a better approach than a negotiation. The trick is in knowing which process to use when. To make that choice, you need to clearly understand your potential buyers, the characteristics of the asset in question, your own priorities, and the relative importance of speed and transparency to obtaining the best price.

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Objectives

01. The Deal Approach- Buyer and Seller: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Negotiation Approach- Speed: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Negotiation Approach- Transparency: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Negotiation Approach- Control: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Negotiation Approach- Competitive Tension: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Negotiation Approach- Resources: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Auction Approach- Speed: departmental SWOT analysis; strategy research & development. 1 Month
08. Auction Approach- Transparency: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Auction Approach- Control: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Auction Approach- Competitive Tension: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Auction Approach- Resources: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Deal Approaches in the Context of Acquisitive Growth: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

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Strategies

01. The Deal Approach- Buyer and Seller: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Negotiation Approach- Speed: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Negotiation Approach- Transparency: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Negotiation Approach- Control: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Negotiation Approach- Competitive Tension: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Negotiation Approach- Resources: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Auction Approach- Speed: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Auction Approach- Transparency: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Auction Approach- Control: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Auction Approach- Competitive Tension: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Auction Approach- Resources: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Deal Approaches in the Context of Acquisitive Growth: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyze The Deal Approach- Buyer and Seller.
02. Create a task on your calendar, to be completed within the next month, to analyze Negotiation Approach- Speed.
03. Create a task on your calendar, to be completed within the next month, to analyze Negotiation Approach- Transparency.
04. Create a task on your calendar, to be completed within the next month, to analyze Negotiation Approach- Control.
05. Create a task on your calendar, to be completed within the next month, to analyze Negotiation Approach- Competitive Tension
.
06. Create a task on your calendar, to be completed within the next month, to analyze Negotiation Approach- Resources.
07. Create a task on your calendar, to be completed within the next month, to analyze Auction Approach- Speed.
08. Create a task on your calendar, to be completed within the next month, to analyze Auction Approach- Transparency.
09. Create a task on your calendar, to be completed within the next month, to analyze Auction Approach- Control.
10. Create a task on your calendar, to be completed within the next month, to analyze Auction Approach- Competitive Tension.
11. Create a task on your calendar, to be completed within the next month, to analyze Auction Approach- Resources.
12. Create a task on your calendar, to be completed within the next month, to analyze Deal Approaches in the Context of Acquisitive Growth.

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Introduction

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The Deal Approach

The “Deal Approach” in the context of buyers and sellers is a multifaceted strategy employed by both parties to facilitate successful transactions. It encompasses a series of steps and principles that guide negotiations and ultimately lead to mutually advantageous agreements. At its core, the Deal Approach is rooted in effective communication and a commitment to finding common ground.

In the initial stages, buyers and sellers engage in negotiations, a vital component of the Deal Approach. This involves a back-and-forth exchange of proposals, counteroffers, and concessions. Negotiation allows both parties to express their desires and concerns, laying the foundation for compromise and consensus.

Central to the Deal Approach is the concept of value proposition. Sellers emphasize the unique qualities and benefits of their product or service, aiming to showcase its superiority or relevance to the buyer’s needs. Conversely, buyers evaluate this value proposition to determine whether it aligns with their expectations and requirements. Information gathering plays a pivotal role as well, with both parties researching each other’s backgrounds, needs, and preferences to inform their positions.

The ultimate goal of the Deal Approach is to achieve a “win-win” outcome where both buyer and seller feel content with the terms of the agreement. This collaborative mindset fosters positive relationships and encourages repeat business. Compromise often comes into play, as concessions may be necessary to bridge gaps and solidify the deal. Legal and ethical considerations are paramount throughout the process, ensuring that negotiations stay within the bounds of the law and ethical business practices.

Once terms are settled upon, the deal is formalized, typically through contracts and payments, marking the closing phase. However, the relationship between buyer and seller doesn’t conclude here. Maintaining a positive post-deal relationship can lead to future opportunities and long-term partnerships. In essence, the Deal Approach represents a dynamic and strategic framework for buyers and sellers to navigate the intricate terrain of transactions and negotiations, with the ultimate aim of creating value for both parties involved.

Who brought about The Deal Approach?

The term “deal approach” is not attributed to a specific individual or a single originator in the same way that some business concepts are associated with particular scholars or thought leaders. Instead, the concept of the deal approach is a general term used in the field of business, negotiation, and sales to describe the approach that buyers and sellers take when engaging in transactions and negotiations.

The principles and strategies associated with the deal approach have evolved over time through the collective experiences and practices of individuals involved in business, sales, and negotiations. Professionals, academics, and experts in these fields have contributed to the development of negotiation strategies, tactics, and best practices, which collectively make up what is referred to as the “deal approach.”

So, while there isn’t a single person or source that can be credited with coining the term “deal approach,” it represents a body of knowledge and techniques that have been refined and passed down through various industries and disciplines over the years. It encompasses the practical wisdom and strategies used by individuals and organizations to navigate the complexities of buying and selling.

How is The Deal Approach linked to Acquisitive Growth?

The Deal Approach is closely linked to acquisitive growth in the context of business expansion and development. Acquisitive growth refers to a strategy in which a company seeks to grow by acquiring or merging with other businesses. The Deal Approach plays a pivotal role in executing successful acquisitions and realizing the benefits of acquisitive growth. Here’s how the two are linked:

1. Identifying Acquisition Targets: In the acquisitive growth strategy, a company must identify potential acquisition targets that align with its growth objectives. The Deal Approach comes into play during the initial stages of identifying, researching, and evaluating potential targets. Buyers (the acquiring companies) use the principles of the Deal Approach to assess the value, fit, and potential of these targets in relation to their existing operations.

2. Negotiating Acquisition Terms: Acquiring a company involves negotiation, which is a key component of the Deal Approach. Buyers negotiate with the target company’s owners or representatives to agree on the terms and conditions of the acquisition. This negotiation process includes determining the purchase price, the structure of the deal (e.g., cash, stock, or a combination), and any contingencies or warranties. The Deal Approach helps both parties navigate these negotiations to reach a mutually acceptable agreement.

3. Due Diligence: Before completing an acquisition, thorough due diligence is essential. The Deal Approach guides the due diligence process, which involves a comprehensive examination of the target company’s financial health, operations, legal and contractual obligations, intellectual property, and other critical aspects. Buyers use the principles of the Deal Approach to gather and evaluate information to ensure they are making an informed decision.