This quarter’s issue of Capital Ideas, our newsletter dedicated to business selling, business buying and financial resources for mid-market companies.
Potential Deal Killers
Working Capital and Working Capital Adjustments
By Jim Zipursky, Managing Director, Omaha Office
There are a lot of different factors which can kill a deal, most of which can be easily avoided. One potential deal killer which can always be avoided is the working capital adjustment (WCA).
What is a WCA? First, we need to define working capital. In its truest form, working capital is current assets minus current liabilities. In the M&A world, we also consider cash free/debt free working capital, which is (current assets less cash) minus (current liabilities less current interest bearing debt instruments).
Why is working capital important to buyers? ... Read more
Why Not Mexico?
An Under-Penetrated Market Ready for Activity
By Eduardo Berdegue, Managing Director, San Antonio/Austin Office
Over the past decade, the surprising evolution of the Mexican economy has been greatly overlooked by the impact of crime-ridden headlines unjustly concealing a vastly more encouraging reality. Improving economic conditions has poised Mexico for a substantial increase in cross-border M&A activity, and is quickly coming to the attention of private equity groups.
As indicated by Richard Fischer, Chair of Dallas Federal Reserve, in the Financial Times last May, it is a mistake to see a country that is outperforming the US in many economic areas through the lens of immigration and drug trafficking… Read more
Situation: Founded in 1989, Qualified Innovation, Inc. has grown to become a leading manufacturer and converter of cohesive cold seal paper, film, and foam packaging. The Company’s products are manufactured in-house at their Sugar Grove, Illinois facility and sold in custom sized rolls or sheets. When the time came to sell the business, their goal was to find a buyer that had the same core values of excellent customer service, creative product development and outstanding quality.
Solution: PolyFirst Packaging, Inc., a Wisconsin based company, specializes in pre-opened bags on a roll for automatic packaging equipment. PolyFirst Packaging determined that adding Qualified Innovations pioneering products to their existing mix would complement their long term growth plans. The acquisition was facilitated with the help of Robert Contaldo and his CFA Chicago team.
Corporate Finance Associates (CFA) is a founding member of ICFG, the 14th largest mid-market M&A firm in the world with over 40 offices in North and South America, Europe, and Asia. In 2011, it completed 97 mid-market transactions, of which 15 were cross-border. Since 1956, CFA has completed more than 5,000 transactions.
For additional information contact:
Douglas Nix, CA | Vice Chairman
Corporate Finance Associates | Toronto West | 905-845-4340 x211 | firstname.lastname@example.org