Let's bring the C.E.O. in you.
If you are the CEO of a USD50 million export/import company and your competitor offered to buy the company for USD100 million. What would be your decision?
Your decision should consider the following;
1. As the CEO of that company, you made a thorough study of the offer and you calculated based on the facts given to you that your present company will be worth USD100 in 15 years.
What would you recommend to the owner of the company.
A: sell the company
B: do not sell the company and implement a more aggressive expansion plan.
give us the company structure, or otherwise no advise is good enough...
i would sell, if its for double. its true that if you are confident that you would make wonders in the future, then you should stick with it. but rare opportunities like this cant be ignored. and the company is in the initial stage then its easy to build one more than waiting for years to make the fortune.
profit as much as possible in the best possible way.
if u have a company board, and a ceo, whos taking a monthly salary
dont sell it!!
simply don't sell...8s like going back to zero unless you're company is eyeing bankruptcy and the buyer that offers double of your company's worth is naive...
A good businessman don't sell its company's assets but instead simply takes good care of his workforce wholeheartedly...
i wont sell the company. else i'll focus on future business plans and strategies how to get the offered amount or more than that in less than 15 years! nothing is impossible.
i will focus more on strategies on how to expand the business and its massive growth. study more on the economy, where to invest, focus on marketing strategy, making the people working under me happy. People is the most valued asset of a company, they must feel that they are the part of the co. that they would be happy to see it growing, expanding.
there is nothing more satisfying than to see a business a success.
cheers!
No... Just 4 months after VA TECH...
You need free advise for executing such a deal? Hire a consultant, do your market studies and take decision based on the reports + input from board! This advise already costs a lot :)
"Oh wait, My previous employer did just that 3 years ago!"
OK, let me clarify:
I ran a housing compound in Saudi.
Our biggest competitor offered SR800m for property that was worth SR400m on the open market. We sold only the business, but not the name.
One clause in the sale contract was that the workforce should be kept on for a minimum of 4 years with no reduction in pay or benefits.
Half the money was then reinvested into a new compound and once opened the majority of the old staff were poached as they liked the old management and hated the new one ;o)
Furthermore, many of the old residents (i.e. the business) came to the new compound as they prefered the way we ran things as opposed to the way our competitor did.
Everyone won except the buyer who is currently under investigation in a huge bankruptcy case :o)!
Is it VA TECH, that you are talking about?
Competitor wouldn't put in premium of USD50 million extra without doing their calculations. It means an error either with them or in your calculations.
If your calculations are thorough
-recommend the owner to go for the offer, pocket a bit of profits earned and you could still continue as CEO even with new owners plus a raise.Else plan with ex-owner to built up another USD50 million enterprise with just the profits.
If you feel you have missed out any facts
- expand aggressively now as you know the company's potential directly from its competitors.
Joe_ooya... I like ur comment as you use the word... but this is really tricky question... 3 years back SIEMENS acquire another company and merged with it in india... the transaction value is 300 million USD... all the employees from small company were happy as they become siemens employee.. two years later, I came out of the company representing the last person of previous company who leaves siemens... Jus think... In three years siemens vanished a competitor in the market including resources... The cheated... they won...
no.. i wont sell... i want to struggle more...
Hey fellows, shall I make the question more simpler?
Good points bluepanther, but i don't like to go back to standard 1.
Some of the suggestions does not bring the CEO in you but the CROOKED and CHEAT in you to sell it and become the buyers compitator, so let is leave them
The other fact is it makes you think of the Goose that lays GOLDEN EGG , where you were greedy and you cut the goose to get all at one shot.
You need to think of the revenue the business is generating and not just the value of the investment, Investment is done once but the revenue generated is recurring. we can go on and on to talk so much on the subject.
What is USD 50 million - the yearly turnover, value of assets, DCF ? You need to value your company today and considering there are future income flows it is more complex with various methods of valuation - based on that you'll able to make a decision of sale.
Btw are you a CEO and asking Qlers to make your decision??
Excellent answers, but I can see only some future CEO's.
Corporate Social responsibility. you can't just sell. you have to think about the workforce and what damage the sale may do to the local community.
it is so tempting to think of selling the company, but before doing that try to sutdy the positive or negative outcome...as CEO of the company, the burden is yours to make sure that the interest of the company is well served....
Anyone in their right mind would sell it...if you can re-invest half and make it double..why wait for 15 yrs??
100% profit - No Brainer. I'd sell, take half the money and start another identical company in direct competition with the people I just sold to using my existing client base.
Oh wait, My previous employer did just that 3 years ago! :o)
Hope your homework assignment gets you A+