While acquisitions do not have any particular formula to guarantee success, there is no doubt that some are more successful than others. Each specific deal has its own strategy, rationale and principles.
BroadSoft, the Gaithersburg company that provides cloud-based telecommunications services for business across the country, has announced that it will be acquired in the next year by California-based Cisco. The price tag? Nearly two billion dollars.
While the ongoing rift in Congress over health care reform continues to garner headlines, the growing activity in the pharmaceutical market continues with little coverage or fanfare. Despite this, the mergers between contract research organizations (CROs, for short) will likely affect health care in ways only investors may see right now.
Once you have built a profitable enterprise, you may start receiving offers for a merger or buyout. You're wise not to brush off them off. As your business grows and becomes more successful, the marketplace may become more competitive.
Recently, it was announced that Media General, a television and magazine company, is selling its business to Meredith for an estimated $3 billion. Maryland readers may already be aware that this sale pushes the dollar amount of mergers and acquisitions to a record high. The last time this many companies and individuals were selling a business on this scale was in 1999.
3M may be best known by Maryland residents for Scotch tape and Post-it notes. The company also makes personal protective gear. Therefore, it may make sense that it would make such a large investment to purchase Capital Safety, which also makes protective gear.
Warren Buffett has long been known as a man with extraordinary foresight when it comes to the stock market and making profitable investments. Those in Maryland who follow Buffett's dealings may already know that he recently decided to make a large investment by purchasing Duracell -- a leading battery manufacturer and distributor. Following an increasing trend, Buffett's company, Berkshire Hathaway, is acquiring the company through a deal that involves a purchase price comprised primarily of stock in Procter & Gamble, which is the company from which Buffett is buying the battery company.
Many types of business transactions require a certain amount of capital. Some require large amounts of funds in order to complete. A business merger between large financial corporations is definitely one of these cases in which a large investment of capital will be necessary. This is part of the reason why National Penn Bancshares, which has one location in Maryland, has initiated a $100 million public offering.
Many large holding companies throughout Maryland diversify their business and acquire a variety of businesses within their portfolio. By operating in this manner, they are able to engage in a variety of endeavors and add to their overall bottom line. Sometimes, however, a part of the portfolio does not meet expectations and can cause problems within the overall company. At other times, the holding company can simply become overextended and find that they would be better served by selling a business to continue to operate in a responsible manner.
Companies throughout Maryland often find that the fastest way to grow and obtain market share is through expansion. This expansion can take place by either creating new locations or through buying a business that currently exists in the market. New locations generally mean additional customers and greater profits for the company. Buying a business can often add these additional customers and profits in the shortest amount of time.