The Biggest Mergers And Acquisitions In Modern History

The world has seen multi-billion dollar mergers in the past. Most of them directly affected entire industries, as well as economies of countries. Many of the biggest mergers and acquisitions in history have affected thousands, maybe even millions, of lives across the globe. Here are some examples of the biggest deals completed in modern times.

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Vodafone and Mannesmann

This was the biggest of the biggest when it came to M&A. It happened at the turn of the century, in February 2000, and involved over $180 billion. Of course, a deal this big would not go down without a few hurdles. Germans didn’t like it at all. They saw the takeover as an ominous sign for their businesses. Vodafone emerged as the biggest mobile operator in the world, and the deal set the bar for all deals to be made in the industry.

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Verizon and Verizon Wireless

In a much more recent global event, Verizon finally took over Verizon Wireless from Vodafone. It didn’t come easy, though. It took Verizon almost an entire decade to get the deal done. In the end, it cost Verizon $130 billion, but it toughened up the company and made it much more competitive in the United States.

Generational Equity is a company that specializes in helping middle-market business owners adjust to M&A transactions. For more on its many success stories, click here.

Added Value: Ways To Increase a Company’s Value Before Selling

A company evaluation measures the value of a company at a given period of time. Before listing a business for sale, one must ensure that its value is maximized in order to attract buyers and to make the most profit. Here are some ways to increase a business’ value before making the sale:

Increase your profits. Naturally, investors would gravitate towards companies that generate profit. Before listing a company for sale, business owners must ensure that potential buyers see continual increase in the company’s profits. Good retained earnings on the balance sheet are definite advantages. If necessary, business owners can look into cutting costs or creating efficiencies to give the company the extra profit boost it needs before a potential sale.

 

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Develop efficient processes and routines. A business should run smoothly, even without the involvement of its former management. Therefore, in order to attract buyers, a business’ operations should be seamless and effective. Moreover, these processes and routines should be well documented to serve as a guide for the new owners of the business.

Keep employee turnover low. The success of a business is just as good as the people behind it, and keeping skilled employees ensures stability for potential buyers.

 

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Generational Equity is a leading M&A firm working with middle-market business owners who seek strategic opportunities for mergers and acquisitions. Visit the company’s official website for more information on its services.

Family Offices: Ideal Investors For Prepared Business Owners

The past few years have seen an increase in private wealth creation, along with it the increase in the number of family offices. Family offices are individual families with high net worth, with generally more than $50 million that they can use for investment. There are also multifamily offices – multiple families who work together and pool their funds for investing purposes.

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The family office model consists of a fairly flexible structure, permitting it to adapt easily to volatile circumstances in the environment and customize their own organization depending on the needs and preferences of the individual and the family office.

More and more, family offices are investing in small- or medium-market businesses. These ultra-wealthy groups are seeking to invest in privately held companies to diversify their investment portfolio and add more to their wealth, which bodes well for business owners prepared to sell wholly or partially.

Family offices not only bring with them the capital to help the business, but they also bring with them extensive industry expertise. These groups tend to invest in industries where they have become financially successful, providing the business invaluable advice and market knowledge.

Another advantage of having family offices buy into the business is their long investment horizon. Unlike other traditional investors, family offices are not bound by a limited timeline; they invest for the long run.

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One of the most appealing reasons to consider selling to family offices is they truly understand the mindset of founding entrepreneur and they realize how important the preservation of the business legacy is to the seller. Most family offices have descended from an original founder several generations earlier. Because of this they know how important it is to maintain the long term legacy of any acquired company.

For business owners looking for a buyer, family offices offer a new, and generally better, alternative. Looking for such groups, and establishing a healthy relationship with them can potentially lead to a mutually beneficial partnership.

A leading M&A firm Generational Equity provides its expertise to entrepreneurs throughout the process of selling their businesses. Learn more about the company through this website.

The Power of Two: Explaining Synergy

Companies, when going through a merger or an acquisition, have one end goal – to create value and performance that seperately they would not be able to achieve. This additional value generated by combining companies is called synergy. Synergy, to put it simply, is the potential financial benefit achieved through merger and acquisition and is the driving force of any M&A transaction.

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Synergy in terms of revenue and market growth is created when two companies have strengths that can be utilized to increase sales of their products. For example, a company that has strong marketing skills merging with a company that has a strong product line would create this type of synergy, as combining their strengths would result in greater revenue than what either could have achieved independently.

Mergers and acquisitions can also allow the companies involved to be more cost-efficient, and thus, more profitable. This is usually the case for two companies in the same business merging. Two steel companies merging would most likely achieve economies of scale, and thus, become more cost-efficient.

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Other aspects where synergy can be created include capital optimization, debt capacity, tax benefits, and diversification.

Generational Equity is a leading middle-market M&A firm located in North America. To know more about the company and its services, visit its official website.

Finding Private Equity Investors for Your Company

Private equity firms are in the business of building value for the enterprises they acquire. These particular buyers are far more discerning than the average ones and would look for businesses that offer long-term prospects for growth in the future.  Their aim is to make small and significant investments in the business over a given time frame, after which they could explore one of two options.

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While some private equity firms draft exit strategies upon building the business’ value, many have also applied the familiar investment concept of buy and hold.  These entities take the slow lane, looking toward profit in the long term.

Middle-market private equity firms often aim to retain not only the original employees and management of the prior firm but also maintain some of the old organizational culture that led to the success of the enterprise and seek significant investments in operational improvements that had been impossible in the past.  This, of course, means that firms espousing the grow and hold strategy make ideal buyers for entrepreneurs who want their business and employees to be left in good hands after an exit.

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Generational Equity assists entrepreneurs throughout the process of selling their businesses.  Learn more about the company and its approach to lower middle market mergers and acquisitions from this page.

Record-breaking Trends in Mergers and Acquisitions: Implications and Opportunities

The year 2015 was known as a record-breaking year for mergers and acquisitions in the United States, with the total volume of sealed M and A’s amounting to $4.7 trillion, beating out the record of $4.4 trillion made in 2007. This represents a 42 percent increase from 2014 and signals a wave of changes and trends in the business sector.

The sheer bulk of M&A activity comes from multibillion dollar buyouts and tie-in deals. Healthcare and pharmaceuticals lead the charge with the closing of a deal between drug giant Pfizer and Botox manufacturer Allergan at a whopping $120 billion. And if current trends continue, this spike in M&A transactions would continue well into this year, opening the possibility of yet another record breaking annual total, this time fueled by the consolidation of regional banks.

The United States in its history has experienced several spikes, in seven key events, in mergers and acquisitions, that signaled a significant change in its economic and business environment. The spike in the 1960s, for instance, marked the rise of the super-corporation as major companies began to diversify their holdings and acquire more businesses. However, this strategy fell out of favor at the turn of the century as more companies turned toward specializing in specific areas.

This new trend is evident in the direction taken by the present batch of mergers and acquisitions, which comprised companies that are expanding laterally, such as Pfizer. The current spike is thought to be the result of difficulties of running a business without a partner in the current economic climates. M&A transactions offer a means for businesses to expand and facilitate growth by making more resources accessible to a company.

Because this impetus largely remains in place, experts predict that M&A transactions would continue well into the foreseeable future, bar a major financial shock. This could be an opportune moment for entrepreneurs looking for exit strategies as the number of willing buyers increases.

Generational Equity assists companies in planning their exit strategies and finding appropriate buyers for potential mergers or acquisitions.