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Northwood University 2015

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This presentations provides an overview to surviving in a world of mergers or acquisitions.

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Northwood University 2015

  1. 1. SURVIVING & THRIVING IN A CONSOLIDATING WORLD TOM MARX JULY 14, 2015
  2. 2. TOM MARX •  30+ years in a,ermarket –  Marke1ng Communica1ons –  Mergers & Acquisi1ons •  Most segments, channels and products •  Industry engagement INTRODUCTION © 2015 Marx Group Advisors, LLC 2
  3. 3. © 2015 Marx Group Advisors, LLC 3
  4. 4. Driving Smarter Mergers & Acquisi4ons Experience. Knowledge. ExperKse. •  Automo1ve •  Performance •  Specialty Products •  Motorsports •  Commercial Vehicle and Heavy Duty •  Tier 1, Tier 2 and A,ermarket MARX GROUP ADVISORS © 2015 Marx Group Advisors, LLC 4
  5. 5. OUR SERVICES Buy-Sell-Merge Market Research Due Diligence Advisor to Private Equity Consul1ng Services Equity & Debt Financing 5 © 2015 Marx Group Advisors, LLC
  6. 6. 6 © 2015 Marx Group Advisors, LLC For a complete list of clients, case studies, and por<olios visit: www.themarxgrp.com WE DELIVER RESULTS
  7. 7. 7 © 2015 Marx Group Advisors, LLC For a complete list of clients, case studies, and por<olios visit: www.themarxgrp.com WE DELIVER RESULTS
  8. 8. 8 © 2015 Marx Group Advisors, LLC WE ARE INVOLVED
  9. 9. 2 3 1 How To Survive...and Thrive What To Expect M&A Scenarios M&A SURVIVAL OVERVIEW © 2015 Marx Group Advisors, LLC 9
  10. 10. Today and Tomorrow • Consolida1ons drive HD sector • Deals keep happening • FleetPride and TruckPro • Distributors • Suppliers • OES • Independent service dealers Heavy Duty Industry Consolidating © 2015 Marx Group Advisors, LLC 10
  11. 11. M&A SCENARIOS Sell/ Divest Acquire Merge Ownership Events Private Equity (PE) READY — AIM — FIRE © 2015 Marx Group Advisors, LLC 11
  12. 12. •  Exit strategy: planned -- or not •  Re1rement and no bullpen •  Accident, illness or worse •  Financial challenges •  Disagreements between partners or family members •  An approach to corporate restructuring •  Get rid of an underperforming asset •  Capitalize on be^er performing assets •  An offer that cannot be refused •  Freedom – It isn’t fun anymore! SELL OR DIVEST © 2015 Marx Group Advisors, LLC 12
  13. 13. •  Grow or fade away •  Strategic acquisi1ons •  Territory •  Market share •  Economies of scale •  Gain new customers, suppliers, management, technology •  Take out the low price leader ACQUIRE A B © 2015 Marx Group Advisors, LLC 13 A B A B
  14. 14. Mergers are propelled by many of the same reasons as acquisiKons •  Shared ownership/equity rather than straight buy-out •  Power and value of the en11es allow for control of equity, joint power to make decisions, and shared responsibili1es MERGE A B C © 2015 Marx Group Advisors, LLC 14
  15. 15. Strengths or weaknesses of the parties deJines if it’s a merger or acquisition © 2015 Marx Group Advisors, LLC 15
  16. 16. Succession planning gone RIGHT •  Next genera1on moves into leadership •  Seamless •  All on the same page •  Plan successfully executed with minimum of drama OWNERSHIP EVENTS © 2015 Marx Group Advisors, LLC 16
  17. 17. Succession planning gone WRONG •  Current genera1on won’t let go •  Illness or worse •  Fric1on builds, frustra1on grows and finally outside therapy comes to rescue •  Drama creates ri,s, slows growth, creates risk •  Plan isn’t executed OWNERSHIP EVENTS © 2015 Marx Group Advisors, LLC 17
  18. 18. PE firms drive consolidaKon •  Provide funds/exper1se needed to grow the business •  Higher mul1ples mo1vate sale •  Supports succession planning •  Buys out certain family members •  Some acquisi1ons are 100% and some can be par1al cash-out or as mo1va1on to stay •  The ul1mate exit strategy •  Result: You now are accountable to someone else ROLE OF PRIVATE EQUITY © 2015 Marx Group Advisors, LLC 18
  19. 19. •  Sell •  Acquire •  Merge •  Private equity •  Ownership event CHANGE – RELEVANCE TO YOU Have you experienced these scenarios? © 2015 Marx Group Advisors, LLC 19
  20. 20. What to expect •  Survival •  Organiza1onal consolida1on and adjustments •  Your value to surviving en1ty •  Leadership CHANGE – RELEVANCE TO YOU © 2015 Marx Group Advisors, LLC 20
  21. 21. The inner sanctum •  What does this mean? •  How do I get there? •  How will I know? •  How do I react when surprises happen? CHANGE – RELEVANCE TO YOU © 2015 Marx Group Advisors, LLC 21
  22. 22. Will I thrive? •  Stay posi1ve •  Find ways to drive collabora1on •  Show objec1vity •  Be focused •  Know when to hold ‘em vs. when to fold ‘em •  And through all this -- get your day job done CHANGE – RELEVANCE TO YOU © 2015 Marx Group Advisors, LLC 22
  23. 23. SINCERITY •  Be me1culous with preparing company for transi1on •  Keeping it quiet—the true meaning of an NDA •  Where do I go to release the tension? •  The ul1mate sign of maturity •  Do I jump ship? YOUR COMPANY IS SELLING © 2015 Marx Group Advisors, LLC 23 TRUST
  24. 24. •  Devil is in the details •  Integra1on o,en is the difference between success or failure •  Planning is important – execu1on is everything •  Build a diverse team •  Opportunity knocks YOUR COMPANY IS BUYING © 2015 Marx Group Advisors, LLC 24
  25. 25. •  Crea1ng financial gain •  Efficiency is key •  Keeping customers happy •  Opportunity knocks •  Do I jump ship? YOU’RE SELLING/MERGING © 2015 Marx Group Advisors, LLC 25
  26. 26. •  The founda1on for successful M&A •  Make sure that the whole is more valuable than the sum of the parts •  No room for duplicate expenses •  Expect many changes •  Keep focus on the metrics required by board, bank or PE firm YOU’RE SELLING/MERGING © 2015 Marx Group Advisors, LLC 26
  27. 27. •  Team builder •  Accountable •  Decision maker •  Redesign or refine the company’s culture ALWAYS BE YOUR BEST © 2015 Marx Group Advisors, LLC 27
  28. 28. •  Retain the best people •  Keep your team informed •  Maintain/increase produc1vity •  Handle issues before panic sets in MANAGE YOUR PEOPLE © 2015 Marx Group Advisors, LLC 28
  29. 29. SUCCESS IS OFTEN UP TO YOU Demonstrate leadership Listen to points of view Find SoluKons Build the team No room for egos © 2015 Marx Group Advisors, LLC 29
  30. 30. •  Grow the business •  Build the brand •  Clarify value proposi1on •  Focus on sales •  Target marke1ng •  Streamline opera1ons •  Understand the finances SHAPE THE FUTURE © 2015 Marx Group Advisors, LLC 30
  31. 31. QUESTIONS? 1 2 3 4 Where are you in the process? What else are you curious about? What are your concerns? What stops you?
  32. 32. Tom Marx | 415.453.0844 x106 tmarx@marxgroupadvisors.com For ar1cles, resources and to sign up to our e-newsle^er The Advantage, please visit www.marxgroupadvisors.com THANK YOU! Contact me if you would like a copy of this presentaKon or further informaKon on buying or selling. © 2015 Marx Group Advisors, LLC 32

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