Dr Chris Millington Swansea University [email protected] @DrChris82 Frenchhistoryonline.com.
Shareholder Value Stewart Millington Business Mentor.
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Shareholder Value Stewart Millington Business Mentor
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Transcript of Shareholder Value Stewart Millington Business Mentor.
Shareholder Value
Stewart Millington Business Mentor
Acquisition & Sale – The Process
Is your company ready for sale?
What influences the price?
Where does acquisition fit in the strategy & am I ready to
make an acquisition?
The targeting process
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Is your company ready for sale?
Where does acquisition fit in the
strategy?
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Two Key Questions
The Role of the Managing Director
Company Foundation
The Profit Engine
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Management Strategy
The Role of the Managing Director
Company Foundation
The Profit Engine
www.avondale.co.uk
Management Strategy
The Role of the Managing Director
Company Foundation
The Profit Engine
www.avondale.co.uk
Management Strategy
The Role of the Managing Director
Company Foundation
The Profit Engine
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Management Strategy
Company Strategy
Time – the Hidden Cost
Buying or selling a company takes up a huge amount of
time.
It is a highly skilled role that only the MD or Senior
Director can undertake.
While undergoing this process, it is imperative that you
keep delivering the financial numbers.
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What Influences the Price?
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What Influences the Multiple?
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Multiple Influencers
Company
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Multiple Influencers
TRUE
GROWTH
Company
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TRUE
GROWTH
Company
Risk
Multiple Influencers
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TRUE
GROWTH
Company
Multiple
Multiple Influencers
Risk
True Growth - Equity Valuation Drivers
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Benchmarked performance against competition
Turnover Growth
Profit Ratios
Equity Valuation Drivers
Income – The Client Base
The Four Areas of Management
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Brand Name
Company Strategy
Company Positioning
Brand Name
Strategic Track Record
The Four Areas of Management
Multiple
Equity Valuation Drivers
Income – The Client Base
The Four Areas of Management
www.avondale.co.uk
Brand Name
Company Strategy
Company Positioning
Brand Name
Strategic Track Record
The Four Areas of Management
Multiple
Equity Valuation Drivers
Income – The Client Base
The Four Areas of Management
www.avondale.co.uk
Brand Name
Company Strategy
Company Positioning
Brand Name
Strategic Track Record
The Four Areas of Management
Multiple
Equity Valuation Drivers
Income – The Client Base
The Four Areas of Management
www.avondale.co.uk
Brand Name
Company Strategy
Company Positioning
Brand Name
Strategic Track Record
The Four Areas of Management
Multiple
Equity Valuation Drivers
Income – The Client Base
The Four Areas of Management
www.avondale.co.uk
Brand Name
Company Strategy
Company Positioning
Brand Name
Strategic Track Record
The Four Areas of Management
Multiple
The Targeting Process
www.avondale.co.uk
What is your acquisition strategy?
What are you looking to acquire and why?
Why should they sell to you?
How are you going to convince them to sell if they are not
for sale?
How are you going to leverage the acquisition?
Cost savings alone are not enough.
Truly successful acquisitions always have the
“additionality” factor
Targeting Criteria
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The Management of Risk
1. Market
2. Company
Targeting Criteria –Market Sector
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Market size
Market growth
Profitability/margin potential
Strength of competition
Strategic fit with your own company
Weight each criteria and score all sectors
Target Map
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Market Segments
Market Segments
Geographical area
Product/Service Sectors
Targeting Process
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Geographical Area
Market Segment
Market Segmen
t
Market Segmen
t
Market Segmen
t
% A B C D
Product/Service Sectors
Product/service 1
90 10 50 80
Product/service 2
60 50 25 70
Product/service 3
45 40 60 65
Targeting Criteria – The Company
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Benchmarked financial performance vs competition
The quality of the income stream and clients
The strength of the management team and systems
Brand name and reputation
Strategic track record and pipeline
Size of target/fit with your company
CULTURAL FIT
Think Long, Think Hard & then be bold
If in doubt – DON’T.
Better to walk away and write of the time and
money spent rather than to proceed.
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Key to Success
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Be prepared
Invest time
Be strategic
Seek advice
