Prospects of a capital gains tax increase after year end have created a surge of deals preparing for or in the market. As the timeline to close by year end shrinks, sellers should now carefully weigh the benefits of accelerating a process to beat a potential tax increase (the magnitude and timing of which is unknown) against the cost of entering a potentially saturated M&A market with less-than-ideal preparation.
Just as specialization in the automotive sector (e.g., material competency, manufacturing processes) results in expertise and competitive advantages, the same holds true in the world of M&A. Tax, legal, and investment banking advisors focused on M&A and in specific industry segments develop specific expertise and have relationships generalists don’t possess. Such expertise typically results in increased proceeds and/or better transaction terms for sellers.
Selling a business can be a deeply emotional experience with multiple competing objectives – maximizing value, cultural fit, synergies, continued employment for personnel, legacy, etc. Defining and prioritizing shareholder objectives prior to undertaking a transaction often will streamline the sale process and better align the selected buyer with the seller’s objectives.
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Automotive M&A Pulse – Q1 2020
As of the date of this writing, a number of major North American OEMs have targeted the re-opening of their production facilities by mid-May. Drawing on best practices used in overseas facilities in COVID-impacted countries that have re-opened, adjustments to everything from the size of the production crew to employee spacing and PPE requirements to…
Automotive M&A Pulse – Q3 2019
It’s no secret that a slowdown is expected in the automotive industry. Guidance from industry-standard data providers indicates a projected overall decline in production volume continuing through 2020. Much can be done in advance of this slowdown to make sure you are well prepared to react appropriately and take advantage of a soft market.
Automotive M&A Pulse – Q1 2019
A major milestone for any automotive supplier is the award and launch of a new program, particularly when supplying components to a new OEM platform. It is vital that such launches go smoothly, and when launching during an M&A transaction, success is even more critical. Actual performance vs. financial projections during a program launch will…