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Quite often, companies, especially smaller, emerging entities will gloat with pleasure over their high margins and declare that all is well with the business. Indeed, all may be well with the business model itself, but what about sustainability of the business as a whole?
How dealmakers can utilize Culture Due Diligence (CDD) to enable their clients to avoid the biggest cause of failure and not fall into the trap of the wrong vocabulary.

Why Do Mergers Fail?

By Adeel Javaid, on Nov 14, 2017
How do we successfully integrate with another company whose values, culture, management approaches, and operating practices are different from ours? What factors are more likely to affect long-term merger success than financial ones?
During a recent Mid-Market Alliance Collaboration Committee call planning a session for the upcoming Winter conference, we talked about market dynamics.  Had the market reached its peak in terms of the volume and in multiples?  Many of us felt that we were indeed starting to see signs of cooling.
Here is our top 10 list of tax reform proposals that, in our opinion, would have the most significant effect on private equity investors and their portfolio companies. Unless stated otherwise, these provisions generally would apply to tax years beginning after 2017:
For business owners, the only time they will get the biggest payday of their life is when they cash out the business they have built. But only if they are ready. Ideally, an exit strategy was established in the business plan from day one. If the business was not launched with an eventual exit in mind, too many entrepreneurs are just buying themselves a job. “Given the costs, stresses and risks involved in most businesses, that is a strange way to keep oneself employed,” says Paul Banister, Director of Tax for Grant Thornton Australia.
Prior to joining Strategex, which exclusively serves B2B clients, I spent 15 years conducting B2C innovation, insight, and strategy engagements. The transition from B2C to B2B was fairly straightforward and intuitive since the essential approach to research methodology, design, analysis, and implementation didn’t change much. I was, however, struck by the sometimes drastically different ways that B2B and B2C firms approach innovation.

The information revolution has yielded a new benefit for the merger and acquisition community that can have significant impact on the decision of whether or not to move forward with a deal as well as ensuring the deal succeeds in the long term. In the past, PR/communication agencies were often called in only after the deal was done and to promote and manage message delivery to key audiences and ensure a smooth transition. However, smart advisors are using those resources much earlier in the due diligence process to conduct a “reputation audit” and achieve benefits including:

'Learn-Improve-Deal' is the AM&AA's new collaboration framework. One way to start using this is to conduct a pre-due diligence quality of earnings (QOE) to help establish a win-win-win attitude in a new professional relationship. This also has the added benefit of helping a business owner understand the complexities of the sales process.
Estate taxes often come up when talking with business owners and other clients as they think about retirement and leaving the business. The sale of the business translates the owners’ biggest asset into cash. The dollars can be considerable and it follows that the taxes on the sale, and ultimately their estate, can likewise be substantial. Concerns about taxes are valid.