Maximizing Value in Acquisitions

1min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

When acquiring a company, it is crucial to consider why the acquisition is more valuable to you than to the seller due to the inherent information asymmetry. Extensive financial analysis shows that acquirers often break-even while sellers benefit significantly. This highlights the importance of understanding what value you bring in the acquisition process, touching on elements like business definition and antitrust regulations. Horizontal acquisitions in industries with scale economies can provide a competitive advantage, but it requires discipline to navigate legal frameworks and optimize value.

7 Powers author Hamilton Helmer and his Strategy Capital colleague Chenyi Shi join us again to discuss their latest research on a topic that’s highly relevant to the recent Acquired canon: how to build a second business line. This incredibly important “transforming” question faces every great company who has achieved initial product success (as well as their investors). Do we continue solely along the established path, or do we attempt to grow new branches on the tree? Some companies grow new businesses with tremendous success — Amazon and AWS, Nintendo and video games, Nvidia and CUDA — yet many others fail miserably. For the first time Hamilton and Chenyi share their research-based playbook on how companies should approach this decision and choose wisely. Tune in!

ACQ2 Show:

Subscribe to the shiny new ACQ2!

Sponsors:
ServiceNow: https://bit.ly/acquiredsn
Vanta: https://bit.ly/acquiredvanta
Modern Treasury: https://bit.ly/acqtransfer

Link to Hamilton's 2-Axis Chart

Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.