A division of a diversified, publicly-traded company was facing a strategic crossroads. Offshore competitors were successfully targeting the commodity end of its product line and the company's new CEO realized that it was just a matter of time before these competitors went after the core. Moreover, in some other product lines, a consolidation in distribution channels was leading to a dramatic power shift away from the manufacturer, leading to significant margin pressure.
The CEO knew he needed to take action and was convinced that mergers & acquisitions should play an important role. He was concerned, however, that the company's corporate development effort was not well-developed, lacking in direction, structure, and capability.
The CEO ultimately wanted to complete several key acquisitions to improve cost competitiveness and strengthen his company's distribution channels. He also did not want to rule out selected divestitures which could help focus the company and free up capital for the acquisition program.
In line with the CEO's objectives, Ameridan's charge was to work with the company's senior executives to :
- Formulate an M&A strategy consistent with the company's strategic objectives;
- Develop a process for identifying and screening acquisition candidates;
- Develop a market-based approach to assessing the shareholder value implications of acquisition and divestiture candidates.
