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Alliances incessantly end in mergers and/or acquisitions. Partnering relationships, similar to joint ventures or strategic alliances, can typically result in a merger or acquisition state of affairs. After firms work collectively for a time period and get to know each other’s strengths, weaknesses, and synergistic prospects, new relationship alternatives turn out to be obvious. One may argue that a three way partnership or strategic alliance is solely the attending to know one another a part of a courtship between firms and that the true marriage doesn’t happen till the connection has been consummated by a merger or acquisition.

To make the purpose, Dan McQueen, president, at Fluid Parts Worldwide (FCI) constructed a Partnering relationship with Vortab, a small expertise firm. Vortab produced static mixers, a expertise appropriate for stream conditioning that complemented FCI’s product providing. Whereas Vortab additionally had three different distribution companions along with FCI, FCI’s quantity with Vortab continued to develop to the purpose that Vortab’s expertise turned an necessary a part of FCI’s complete gross sales quantity. After about three years into the connection, FCI acquired Vortab.

Due to the shut relationship between Vortab and FCI, when the Vortab was put up on the market McQueen knew its true worth. Ensuing from his data, FCI was in a position to buy Vortab at a way more life like worth than Vortab’s asking worth. The Vortab expertise built-in nicely with FCI’s core competency expertise and right now FCI additionally distributes Vortab by means of a few of its non-direct opponents.

The next listing demonstrates among the particular values created or developed from the varied organizational mixing strategies:

· Operational useful resource sharing

· Purposeful ability switch

· Administration ability switch

· Leverage (economies of scale)

· Functionality will increase


Mergers happen when two or extra organizations come collectively to mix or hyperlink their strengths. Additionally within the deal is a mixing of their weaknesses. The hopeful result’s a brand new extra highly effective group that may higher produce items and companies, entry markets, and ship the best high quality customer support. Mergers supply promise for synergistic prospects. That is achieved by the mixing of cultures and retaining the core strengths of every. On this situation, a brand new and completely different group typically emerges. The purpose is a sharing of energy, however often the strongest rise to the highest management.

Exxon – Mobil

The Federal Commerce Fee gave Exxon and Mobil the inexperienced mild On November 30, 1999 for his or her $80 billion merger. The following day the transaction was accomplished. The merged group formally turned Exxon Mobil Corp. The merger really brings “the businesses again to their roots once they had been a part of John Rockefeller’s Commonplace Oil empire. That firm was the biggest oil agency on the earth earlier than it was busted up by the federal government in 1911.”

On the 1998 announcement of their intention to merge, Mobil chairman, Lucio Noto made a remark about the necessity to merge. He mentioned, “At the moment’s announcement mixture doesn’t imply rhat we couldn’t survive on our personal. This isn’t a mixture based mostly on desperation, it is one based mostly on alternative. However we have to face some details. The world has modified. The straightforward issues are behind us. The straightforward oil, the simple value financial savings, they’re accomplished. Each organizations have pursued inside efficiencies to the extent that they may.”

Whereas a part of the deal was the promoting of a Northern California refinery and virtually 2,500 gasoline station areas, the divestiture represents solely a fraction of their mixed $138 billion in property. Lee Raymond, Exxon chairman, now chairman and chief government of the merged firm mentioned, “The merger will permit Exxon Mobil to compete extra successfully with just lately mixed multinational oil firms and the big state-owned oil firms which can be quickly increasing exterior their house areas.”

Exxon Mobil is now like a small oil-rich nation. They’ve virtually 21 billion barrels of oil and gasoline reserves readily available, sufficient to fulfill the world’s whole power wants for greater than a yr. But, there may be nonetheless the chance to chop prices. The businesses anticipate their merger’s economies of scale to chop about $2.eight billion in prices within the close to time period. In addition they plan to chop about 9,000 jobs out of the 123,000 worldwide.

AOL – Time Warner

On January 10, 2000, Steve Case, chairman and chief government of America On-line (AOL), despatched an e-letter to his 20 million members. He mentioned, “Lower than two weeks in the past, individuals all around the world got here collectively in a worldwide celebration of the brand new century, and the brand new millennium. As I mentioned in my first Neighborhood Replace of the 21st Century, all of us at AOL are extraordinarily excited by the challenges and prospects of this new period, a time we consider because the Web Century.

I imagine we’ve got solely simply begun to see clearly how the interactive medium will rework our economic system, our society, and our lives. And we’re decided to paved the way at AOL, as we’ve got for 15 years–by bringing extra individuals into the world of interactive companies, and making the web expertise an much more worthwhile a part of our members’ lives.

That’s the reason I’m so happy to let you know about an thrilling main growth at AOL. At the moment, America On-line and Time Warner agreed to affix forces, creating the world’s first media and communications firm for the Web Century. The brand new firm, to be created by the top of this yr, can be known as AOL Time Warner, and we imagine that it’s going to fairly actually change the panorama of media and communications within the new millennium.”

The following day newspaper headlines learn, “America On-line, Time Warner Suggest $163-Billion Merger.” The Los Angeles Instances mentioned, “In an audacious deal bringing collectively conventional leisure and the brand new world of the Web, America On-line and Time Warner Inc. on Monday introduced they are going to merge within the largest enterprise transaction in historical past.”

The story later revealed the worth comparisons of the businesses. Whereas AOL earns lower than Time Warner, the inventory market thinks AOL’s shares are value extra. “America On-line is valued by the inventory market at almost twice Time Warner–$173 billion, in contrast with $101 billion as of Friday’s [1/7/00] market close–even although it has one-third Time Warner’s annual revenues.” The article additionally said “AOL earned $762 million on $four.eight billion in gross sales within the yr ended Sept. 30 [1999].”

AOL chairman, Case desires to maneuver quick. The Instances article said, “Case mentioned the 2 chairman started discussing a mixture this fall [1999], he has tried to impress upon Levin [Gerald Levin, chairman at Time Warner] the necessity to function the brand new firm at Web speeds.” (Everyone knows the remainder of the story…nothing is endlessly.)

The prophets of gloom are at all times able to level out the down facet to offers. In UPSIDE journal, Loren Fox reported among the challenges to the wedding. They’re:

· “The holy grail of strategic synergy has been elusive within the media world.”

· “Within the offline world, it is notable that Time and Warner Brothers have continued to run pretty independently regardless of a decade as Time Warner.”

· “‘From any standpoint, this has not been a hit to this point,’ says Yahoo President and COO Jeff Mallett.”

· “Whenever you purchase the corporate, you get issues you do not want.”

· “Warner would possibly make these offers simpler, however it may additionally convey new risks–even for AOL, a veteran of 25 acquisitions during the last six years. Staff would possibly flee to pure dot-com firms, ego clashes may stymie plans or monetary good points might by no means cowl the big premium paid for Time Warner.”

· “You need not personal the whole lot to do what AOL and Time Warner are doing.”


Merger mania could make unusual bedfellows, not to mention guarantees unfulfilled. Alliances can result in mergers. Warner-Lambert is an instance of all of the above. That is company cleaning soap opera at its finest.

· June 16, 1999, Warner-Lambert Firm introduced that it has signed a letter of intent with Pfizer Inc. to proceed and develop its extremely profitable co-promotion of the cholesterol-lowering agent Lipitor (atorvastatin calcium). The businesses, which started co-promoting Lipitor in 1997, will proceed their collaboration for a complete of ten years. Additional, with a purpose of increasing their product collaborations, the businesses plan to discover potential Lipitor line extensions and product combos and different areas of mutual curiosity.

· November four, 1999, newspapers throughout America report on “one of many greatest mergers of any type, ever.” The Wall Avenue Journal mentioned, “Now, American Dwelling is about to merge with Warner-Lambert Co. in a inventory deal that’s valued at about $72 billion. It stands as the most important deal in drug-industry historical past and one among on the most important mergers of any type, ever.” Additionally reported, “Warner-Lambert held talks with Pfizer Inc. on the similar time it was negotiating with American Dwelling.”

· November four, 1999, The New York Instances runs a narrative titled, “Can a Sturdy-Willed Chief Share Energy in a Merger?” The article lead with, “The deliberate merger between American Dwelling Merchandise and Warner-Lambert as soon as once more raises the query of whether or not John R. Stafford, American Dwelling’s famously strong-willed chairman and chief government, is able to sharing and, maybe extra necessary, letting go of energy.”

· January 13, 2000, Warner-Lambert Firm indicated that, because of altering occasions, it’s exploring strategic options, together with assembly with Pfizer, following Pfizer’s latest strategy. In that regard, Warner-Lambert mentioned that its Board of Administrators has licensed administration to enter into discussions with Pfizer to discover a possible enterprise mixture. The Firm said that, in mild of adjusting circumstances, its Board had concluded that there’s a affordable chance that Pfizer’s beforehand introduced conditional proposal may result in a transaction, moderately able to being accomplished, that’s higher financially for Warner-Lambert shareholders than the proposed merger with American Dwelling Merchandise.

Lodewijk J.R. de Vink, chairman, president and chief government officer of Warner-Lambert, said, “It has at all times been the Board’s goal to safe the absolute best transaction for Warner-Lambert shareholders and we’ll now pursue discussions with Pfizer to find out if a mixture with them to realize that purpose is feasible.” The Firm emphasised that there will be no assurance that any settlement on a transaction with Pfizer, or that another transaction, will eventuate.

· January 24, 2000, in response to inquiries, Warner-Lambert Firm mentioned that it will proceed to discover strategic options, together with discussions with Pfizer. The Firm’s unwavering purpose is to supply the best worth to Warner-Lambert shareholders. Warner-Lambert officers emphasised that there will be no assurance that any transaction can be accomplished and supplied no additional remark.

Was American Dwelling Merchandise the bride left on the altar? The Wall Avenue Journal did not assume so, in truth they known as American Dwelling the Runaway Bride of their November article. Moreover they listed a number of firms that American Dwelling has them selves left on the altar.

· Early November 1997, American Dwelling Merchandise and SmithKline Beecham start merger talks.

· January 30, 1999, Talks break off.

· June 1, 1998, American Dwelling and Monsanto announce settlement to merge.

· October 13, 1998, American Dwelling and Monsanto cancel plans to merge.

· November three, 1999, American Dwelling and Warner-Lambert Co. in talks to merge.


An acquisition is mainly the operate of 1 firm consuming and digesting one other. The result’s that the buying firm shores up core weaknesses or provides a brand new functionality with out giving up management, as would possibly happen in a merger. Added capabilities, somewhat than synergy is often the reasoning behind acquisitions. On this state of affairs, the buying firm’s tradition prevails. Ceaselessly one firm will purchase one other for his or her mental property, their staff or to extend market share. There are quite a few methods and the explanation why one firm acquires one other, as you’ll quickly uncover.

Guardian Safety Companies has been buying alarm firms inside its northeast area of operation to complement its inside progress. Russ Cersosimo, president says, “That is simply one other means for us to fulfill our urge for food for progress. Our want is to develop our alternatives within the different workplaces. That’s another excuse why it’s enticing for us to look to accumulate firms, to get their business base and business gross sales drive that’s in place in these workplaces. We wished to make it possible for we are able to digest the brand new accounts with out placing pressure on our paper stream and the programs we’ve got in place.”

Who does R&D acquisitions nicely? Electronics Enterprise just lately answered, “Cisco Methods Inc., San Jose, the networking gear firm, which boasts many success tales amongst its 40 acquisitions of the previous six years.” None of their acquisitions had been in mature markets, somewhat all had been forefront, permitting Cisco to broaden its product providing. Cisco hedges its acquisition bets by means of quantity. Ammar Hanafi, director of the enterprise growth group at Cisco says it counts on two out of three acquisitions succeeding and the remaining third doing simply okay. Buying individuals, mental properties and specialised expertise is necessary to firms like Cisco. They assume that even when the acquired expertise doesn’t pan out, they’ve the engineers. Usually, any quick rising firm like Cisco can’t rent individuals quick sufficient and the acquired personnel are a boon to the corporate’s progress. Retention of acquired staff is on the coronary heart of their acquisition technique. “If we will lose the people who find themselves necessary to the success of the goal firm, we’re most likely not going to have an curiosity,” says Cisco controller Dennis Powell.

“Cisco would not do huge acquisitions, the cultural points are too big,” Hanafi says. Cisco buys early stage firms with little or no revenues. Whereas they typically have paid extraordinarily excessive costs for the acquisition, they appear to do higher than most with their choice. Between 1993 and 1996, Cisco purchased leading edge LAN switching applied sciences for a complete of $666 million in inventory. Greater than half was spent on Grand Junction Networks Inc., which developed quick Ethernet switchers. On the time of buy, it’s estimated that Grand Junction’s annual revenues had been $30 million. “At the moment, the 4 LAN switching acquisitions account for $5 billion of Cisco’s $12 billion in annual revenues.” “We purchase firms as a result of we imagine they are going to be profitable. If we did not imagine of their success, we’d not purchase them,” says Powell.

Little recognized West Coast Texas Pacific Group (TPG) has been buying at a feverish tempo. Their semiconductor and telecom shopping for spree contains, GT Com in 1995, AT&T Paradyne (from Lucent Applied sciences Inc.) in 1996, Zilog Inc. in 1997, Landis & Gyr Communications SA in 1998, ON Semiconductor (from Motorola Inc.), Zhone Applied sciences Inc., MVX.COM and Superior TelCom Group Inc. in 1999.

TPG banks closely on mental capital. Many imagine that by being a part of TPG, their single greatest benefit is entry to broad pool of gifted and well-connected individuals. CEOs can reap the benefits of TPG’s contacts in different industries world wide. “TPG has this capability to construct a digital advisory board…that they do not even should pay for,” says Armando Geday, president and CEO of GlobeSpan Inc.

Lucent Applied sciences, Inc. has additionally been rampaging by means of the identical market as Cisco. Lucent’s 1999 (January to August) acquisitions as listed in CFO journal embrace:

· Kenan Methods for $1 billion

· Ascend Communications for $24 billion

· Sybarus for $37 million

· Allow Semiconductor for $50 million

· Mosaix for $145 million

· Zetax Tecnologia, $ N/A

· Batik Equipamentos, $ N/A

· Nexabit Networks for $900 million

· CCOM, Edisin, $ N/A

· SpecTran for $99 million

· Worldwide Community Companies for $three.7 billion.

A bonus that Lucent has over its opponents is entry to its 25,000-employee Bell Labs concept manufacturing unit. As such, they’re extra more likely to buy expertise somewhat than R&D. Nonetheless, Lucent regularly opinions the comparative benefits of expertise and R&D in relationship to its personal initiatives in reviewing acquisition prospects. Lucent government vp and CFO Donald Peterson says, “In each area through which we’ve got acquired, we’ve got had simultaneous analysis initiatives inside. It makes us educated, and lets us have a build-versus-buy choice.”

Lucent desires their items as a gap to do nicely and if acquisition helps that trigger, they purchase. Peterson additionally says, “We view acquisition as a software amongst many who our enterprise items can use to advance their enterprise plans. We consider acquisitions one after the other, within the context of the enterprise technique of the unit.”

Tyco Worldwide Ltd. is a diversified international producer and provider of commercial merchandise and programs with management positions in every of its 4 enterprise segments: Disposable and Specialty Merchandise, Fireplace and Safety Companies, Stream Management, and Electrical and Digital Parts. By way of its company methods of high-value manufacturing, decentralized operations, progress by means of synergistic and strategic acquisitions, and growth by means of product/market globalization, Tyco has developed. From Tyco’s beginnings in 1960 as a privately held analysis laboratory, it has remodeled into right now’s multinational industrial company that’s listed on the New York Inventory Change. The Firm operates in additional than 80 nations world wide and had fiscal 1999 revenues in extra of $22 billion.

Within the mid-1980s, Tyco returned its focus to sharply accelerating progress. Throughout this era, it reorganized its subsidiaries into the present enterprise segments listed above. The Firm’s identify was modified from Tyco Laboratories, Inc. to Tyco Worldwide Ltd. in 1993, to mirror Tyco’s international operations extra precisely. Moreover, it turned, and stays, Tyco’s coverage to concentrate on including high-quality, cost-competitive, low-tech industrial/business merchandise to its product traces that may be marketed globally.

As well as, the Firm adopted synergistic and strategic acquisition pointers that established three base-line requirements for potential acquisitions, together with:

1. An organization to be acquired have to be in a enterprise associated to one among Tyco’s 4 enterprise segments.

2. An organization to be acquired should be capable of develop the product line and/or enhance product distribution in at the very least one among Tyco’s enterprise segments.

three. An organization to be acquired that may introduce a brand new product or product line have to be utilizing a producing and/or processing expertise already acquainted to one among Tyco’s enterprise segments.

Tyco additionally developed a extremely disciplined strategy to acquisitions based mostly on three key standards that the Firm continues to make use of right now to gauge potential acquisitions:

1. Publish-acquisition outcomes could have a direct optimistic affect on earnings;

2. Alternatives to boost working earnings have to be substantial;

three. All acquisitions have to be non-dilutive to shareholders.

FASB Accounting Rule Change

The foundations of the sport are altering. A few of the accounting advantages of acquisition will quickly disappear. Spending some additional time together with your accounting and authorized departments may show useful within the long-term.

George Donnelly, in his article in CFO journal writes, “The present state of accounting guidelines is clearly an element within the frenetic acquisition exercise at Cisco Methods and Lucent Applied sciences Inc. Like many high-tech firms, the 2 giants can purchase with little drag on their funds, as a result of pooling-of-interest accounting allows them to keep away from onerous goodwill prices that in any other case would ravage earnings.

However due to the loss of life sentence the Monetary Accounting Requirements Board has levied on pooling, firms should use straight-purchase accounting after January 1, 2001. Then patrons should amortize goodwill for not more than 20 years.”

Consolidations and Rollups

Invoice Wade in Industrial Distribution mentioned: “The essential premise could not be any easier. Take a extremely fragmented industry–like distribution–facing technological change, buyer upheaval or power financing difficulties. Add in a couple of well-healed overseas companies or, worse, a few beforehand unknown opponents from exterior the enterprise. Because the leaders are most likely family-run companies with restricted succession methods, the following step to guard revenue and proceed progress is obvious: consolidate.”

A consolidation or rollup, because it’s incessantly known as, typically happens when a company or particular person with deep pockets units out to purchase a number of small firms in a fragmented and rein them in beneath a brand new or collective pennant. In 1997 the Nationwide Affiliation of Wholesale-Distributors reported that 42 of the 54 industries they studied had been considerably affected by consolidation. Ceaselessly knowledgeable administration and shopping for energy create economies of scale that permits the consolidator to pluck the low hanging fruit within the . They are going to make investments considerably in programs to get rid of the duplication of effort and inefficiencies that exist throughout the being consolidated.

Whereas some name it smoke and mirrors, many consolidators are yielding excellent outcomes. In 1997, at 39 years previous, monetary whiz Jonathan Ledecky pulled off a daring deal. As reported in CFO journal, He went to the general public fairness markets and raised half a billion dollars for his firm, Consolidation Capital Corp., in a brazen preliminary public providing. With out revenues, property, working historical past or id (identify or ), he raised the capital in a blind pool on the energy of his status alone.

U.S. Workplace Merchandise (USOP) is the results of 220 acquisitions. Sharp Pencil was one among six privately owned office-supply firms that Ledecky put collectively. However he did not cease, after two years, and 220 acquisitions later, USOP was a member of the Fortune 500, with $three.eight in revenues. “It was loopy,” says Donald Platt, senior vp and CFO at USOP. Platt did rely extremely on exterior sources, together with a crew of attorneys and accountants to get the job accomplished (the 220 acquisitions). “We restricted then to well-managed, worthwhile firms. At worst, we’d nonetheless be earning money,” says Platt.

H. Wayne Huizenga is the proprietor of the Florida Marlins baseball crew. He’s additionally the king of consolidators. He pioneered his approach by rolling-up trash-truck companies to create Waste Administration Inc., the nation’s largest waste firm. He went on to create the biggest video chain, Blockbuster Video. With AutoNation, Huizenga, now struggling, is attacking the retail vehicle . In mid-December 1999 AutoNation had 409 retail franchises however introduced the closing of 23 of their used-car superstores.

Michael Riley realized about consolidations whereas serving as private lawyer for Huizenga. In July 1999, Riley’s firm, Atlas Leisure Holdings Inc., paid $14 million to buy controlling curiosity in the one publicly traded RV dealership chain in america, Vacation RV Superstores Inc., in Orlando, Florida. Riley’s avowed intention is to develop the corporate from $74 in annual gross sales in 1998 to $1 billion by 2003 by buying different dealerships.

Riley says, “Consolidations actually will assist. We will convey benefits to gross sales and repair. We will make a distinction in guarantee. There’s a actual worth added if you put these firms collectively.”

Similar Trade, Totally different Methods

In mid-1997, roll-ups, United Leases and NationsRent had been shaped. They’re in a race, however are utilizing completely different methods to realize their outcomes. After two years of ravenously gobbling up firms, United had 482 areas whereas NationsRent had amassed solely 138 shops. NationsRent has been creating a nationwide id with shops that look-alike and have the identical signage and structure. United Leases presence is just about unknown because the shops retain their earlier look.

Motivations for Consolidators

There are a number of good the explanation why consolidators assault a selected . The next listing supplies among the rational that help them of their choice making course of. As you look to revenue from the development, preserve these components in thoughts as you make your choice on whom to accumulate.

· Confidence by the gamers that they’ll seize important and extremely worthwhile extra market share by implementing the leading edge administration, procurement, distribution and repair practices that may give them a aggressive edge over smaller gamers.

· Achieve nationwide clients by means of elevated capabilities in delivering the best ranges of standardized service and nationwide geographical protection.

· Bigger clients of unbiased distribution channels are searching for broader geographic protection and networks of areas that permit for higher service capabilities, and the smaller clients need a excessive stage of customer support and response.

· Clients’ want for extra product sophistication.

· Insurance coverage and financing synergies.

Fragmented Industries Are Ripe for Consolidations and Rollups

Some industries which can be prepared for consolidations or rollup examples embrace heavy-duty truck restore, workplace merchandise, leisure automobile dealerships, rental shops (gear, instruments and celebration) and distribution. Consolidation doesn’t simply occur. It’s triggered by shifts in provider and buyer expectations. Consolidation in a provider base or buyer pool typically alters the financial rational for the construction of an . Purposeful shifts are accompanied by severe margin shifts amongst channel contributors.

Take discover of the velocity through which an can expertise consolidation. If you’re a consolidator, decide the low hanging fruit earlier than one other beats you to it. If you’re combating consolidation, take discover of the state of your and make changes (like strategic alliances) to your marketing strategy in case your is extremely fragmented.

· TruckPro, the $150 million gross sales creation of Haywood and Stephens Investments, was bought in Might 1998 to AutoZone, the $three billion distribution king of do-it-yourself auto components.

· In June 1998, 9 heavy-duty distribution firms with volumes of $6 to $37 million, concurrently merged and raised $46 million from the general public for his or her model new $200 million firm, TransCom USA.

· Brentwood Associates, a enterprise capital firm, throughout Spring and Summer season1998, created HAD Components System, Inc. a $145 million operation, by buying three firms within the Southeast.

· In July 1998, Aurora Capital’s QDSP acquired majority curiosity in 9 heavy-duty firms from FleetPride, a $200 million components and repair operation.

Said in Truck Components & Service, “Right here the unbiased suffers a staggering drawback to roll-ups. Consolidators have entry to giant quantities of capital. The unbiased businessperson, nonetheless, should primarily finance his progress by earnings retains from present operations. New excessive effectivity service bays, important and rising coaching bills, information processing and communications expertise all clamor for elevated working capital. The massive gamers’ acquisition value benefit ultimately will win him all of the mega-fleet enterprise and the overwhelming majority of enterprise from mid-sized fleets.

Supplementing his components acquisition value benefit, the consolidator will be capable of decrease many overhead prices by means of centralized administration and quantity reductions…Mixed financial savings in components acquisition value and overhead discount ought to simply exceed four% of gross sales.”

A few of the indicators that an (any ) is poised for consolidation are listed beneath. If you happen to discover your has related points, it’s only a matter of time. Plan now for what’s coming. The place do you wish to be when the practice arrives?

· A excessive diploma of fragmentation with quite a few smaller firms and few, if any, dominating gamers.

· A big that’s steady and rising.

· A number of advantages for economies of scale.

· Synergies that may be achieved by consolidating firms.

· Rare use of superior administration data programs.

· Restricted entry to public capital markets and considerably inefficient capital buildings amongst firms.

· Lack of alternatives, traditionally, for house owners to liquidate their companies in the event that they want to go away the .

Causes for Enterprise Homeowners Promoting to Consolidators

The explanations for a enterprise proprietor to promote his or her enterprise are as diverse as there are individuals. Often it isn’t one motive however a number of mixed causes that affect a vendor’s choice. The next listing supplies you with the final areas which may drive a promoting choice:

· First technology proprietor, with out heirs, nearing retirement.

· Lack of capital to make essential technological and capital enhancements to compete, inside an , and with new opponents.

· Flat progress charge in .

· Higher profitability as half of a bigger group.

· Centralized shopping for.

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