Acquisitions of smaller professional services firms yield great benefits; "Deals Update" highlights trends in professional services, Banking M&A as well as due diligence issues.NEW YORK--(BUSINESS WIRE)--June 19, 1996--Today, Price Waterhouse Corporate Finance characterized the trends in the M&A marketplace in its "Deals Update": PROFESSIONAL SERVICES (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. o Acquirors are realizing the advantages of takeovers of smaller professional service concerns. Small size allows acquiring companies to work directly with key players to keep talent in place by giving them significant personal financial stakes in the deal. Defections of personnel have been problematic particularly in fields such as investment banking and money management. FINANCIAL BUYERS o Financial buyers of the '90s are riding companies' growth waves to produce the returns investors demand. Moving away from the '80s cost reduction and bust-up techniques, financial buyers are generating profits by building value. Often, to get deals done in this tough environment, buyout firms have been devoting more of their own capital than typical of '80s deals. BANKING o The drive for non-U.S. banks to build global investment banking presences continues. Establishing overseas bases has long been a priority, but expect to see more activity now as foreign institutions target smaller or more focused U.S. investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. in an effort to better retain talent after a takeover. DUE DILIGENCE Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. o Complex "financial engineering" of today's transactions should not distract dealmakers from the basics of due diligence investigations, which can pay big dividends in the end. Buyers can frequently avoid protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. , post-acquisition purchase price disputes by paying attention Noun 1. paying attention - paying particular notice (as to children or helpless people); "his attentiveness to her wishes"; "he spends without heed to the consequences" attentiveness, heed, regard to the basics of thoroughly examining the target company's financials for potential problems, especially in areas such as non- recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. charges and debits in sales accounts. o The key to avoiding purchase disputes after an acquisition is to use the due diligence process to explicitly define in the contract every financial accounting matter and potentially divisive di·vi·sive adj. Creating dissension or discord. di·vi  sive·ly adv.di·vi issue. This approach will eliminate the grayness of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and allow management to immediately move forward and devote full attention to the company's growth and restructuring plans, which can dramatically increase the return on equity. Deals Update is a monthly bulletin on transaction-related topics issued by Price Waterhouse Corporate Finance. Worldwide, Price Waterhouse Corporate Finance comprises more than 850 professionals, who bring together a broad range of transaction support and investment banking experience, assisting on more than 250 assignments totalling over $30 billion. The international network of Price Waterhouse firms has 3,200 partners in 450 offices in 117 countries. CONTACT: Maria Gonzalez, 212/880-5278 Heather Harper Heather Harper (born May 8, 1930) is an Irish operatic soprano. She was born in Belfast, Northern Ireland, where she received her early musical training. She studied piano at the Trinity College of Music in London, with voice as a second subject, and sang with the BBC chorus. , 212/880-5331 Ogilvy Adams & Rinehart |
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