Petrogram - Spring 2016 - (Page 16)
MATRIX TO SAVE TIME
By Betsi Bixby, Meridian Associates, Inc.
am going to pass on a valuable secret acquisition weapon to you! While you don't
see me issuing press releases and publicly announcing who is buying who, I've been
involved in scores of confidential buy/sell transactions over the past two decades.
I love matching family companies with other family companies and making great
culture fits where everyone makes money and is happy!
What I came to realize was that too
many marketers were wasting needless
hours contemplating, studying and even
structuring and massaging acquisitions
that simply were not good fits. Their desk
was being cluttered by every Tom, Dick or
Harry broker sending out multiple solicitations, so all of sudden growing marketers
were faced with scores of opportunities.
The families would spend hours talking
about deals, going around in circles. I knew
I needed to do something to get them clear
I've been a believer in rating matrixes,
using them in credit and project prioritization for years. So my solution to get them
unstuck was to help each family create a
rating matrix to filter acquisitions. Since
each company's sweet spot and strategy
is different, and strategy is fine-tuned and
even redirected over time, each matrix is
customized to exactly match what the company truly needs to catapult to the next
level. And best of all, you don't need me
to do it! Here's how...
First, in general, the components of the
matrix should include preference in geography, sectors/specialties, size, business
core values/culture fit, physical assets (with
specifics), technology, and people assets
(with specifics). You can add or subtract,
making the matrix fit your exact needs.
The act of purposefully creating the
matrix as a family team allows for meaningful dialogue and unveiling of differing views
and preferences. The team approach gets
those differences out on the table where
they can be dealt with effectively and consensus and agreement built. It's far better
for these discussions to happen in a board
room, building the matrix prior to any emotional pressure of an eminent acquisition
while everyone still has cool heads!
For example, I was working with a family
where suddenly a mixed wholesale and
retail opportunity had presented itself
through a broker. This family had sold off
some retail years before so was totally out
of that sector. While half the family loved
the idea of a retail presence, the other half
was not thrilled with going back into a situation with so many employees again. This
raised healthy discussion over the family's
objectives and different ways their volume
and profit potentials could be achieved.
As the family gains clarity, I'm a stickler
for including some sort of Return on Assets
(ROA) component. Any acquisition should
incrementally add to ROA and not dilute.
I'm not opposed to buying distressed situations, but the forecast must show the
end result increases the overall ROA on the
SINCE EACH COMPANY'S SWEET SPOT AND STRATEGY
IS DIFFERENT, AND STRATEGY IS FINE-TUNED AND
EVEN REDIRECTED OVER TIME, EACH MATRIX IS
CUSTOMIZED TO EXACTLY MATCH WHAT THE COMPANY
TRULY NEEDS TO CATAPULT TO THE NEXT LEVEL.
View past issues of Petrogram online at www.fpma.org
Table of Contents for the Digital Edition of Petrogram - Spring 2016
Legislative Days 2016: Recap and Photos
Making the Switch: The Countdown to EMV at the Pump in 2017
Legislation Seeks to Combat Skimming & Fraud
Using an Acquisition Rating Matrix to Save Time and Arguments
Top Tips to Lead and Empower Employees
Calendar of Events
Index of Advertisers/Advertiser.com
Petrogram - Spring 2016