Is it takeover time?

Citation

(2002), "Is it takeover time?", Anti-Corrosion Methods and Materials, Vol. 49 No. 5. https://doi.org/10.1108/acmm.2002.12849eaf.003

Is it takeover time?

Is it takeover time?Keywords: Acquisition, Merger, Business planning

Ever wondered whether any of your competitors were worth buying or selling to? A new service by financial analysts, Plimsoll Publishing, is aimed at directors or managers intrigued by the prospect of buying out or selling up their company, without calling in the professionals.

"Taking a 'sneaky' look at the options, the service provides company details and analysis on who may be a good acquisition as well as those that have cash to spend. If there is a company out there that suits your needs, we'll find it," says David Pattison, Acquisitions and Mergers manager.

The service includes a full valuation of 388. companies in the UK metal treatments industry, each with a current and future value. The analysis is then split into two types of company, the "buy" options of those suffering financially and exposed to aggressive predators, and the "sell" options of those with cash to spend and a company desperate to capitalise on its winning position.

The service costs £600. A free confidential proposal can be sent to you by calling David Pattison on +44 (0)1 642 626400.

Initially, 1,208 companies in the metal treatments industry were analysed and considered as acquisition prospects or companies healthy and viable to which to try to sell a company. This offered a proactive method of spotting companies that otherwise might have gone unnoticed.

Size of company

While not always the best element to look at, it is by far the most obvious factor to consider when targeting. The options are presented simply (see Table II).

Pricing companies

Perhaps a more exciting way to look at an acquisition is what a company is worth and, more importantly, what it could be worth in the future. The prices produced are subjective and are designed to encourage debate on attractiveness (see Table III).

Predicting problems

The Plimsoll method of analysis is designed to predict problems in a company often before the company knows about them. Using a predictive method that looks at four years of historical performance, early warning signs are noted and used to tweak performance (see Table IV).

Predicting future worth

In addition to historical performance, each company is provided with a future forecast, the basis of which is to show how they can be more valuable. One of three plans is adopted to form the basis of acquisition attractiveness (see Table V).

It seems that the French do it better than the British, according to a second analysis covering both UK and French companies in the metal treatments industry. Plimsoll informs us that its analysis has revealed a huge difference in performance levels between the two countries.

The comparisons are said to be overwhelmingly in France's favour. On average French metal treatments companies are stronger financially with essentially less debt, giving these companies an edge. The market is also expanding faster. Average sales growth in the French metal treatments industry is 9.9 per cent, compared with the UK average of 0.3 per cent.

According to David Pattison, financial analyst for Plimsoll Publishing, "For some years now the UK market has shown very little growth. Any growth by individual companies has been at the expense of others. I believe that this has been feeding intense competition and fuelling reduced margins."

"The resulting problem is that UK companies have been forced to finance capital and losses to fight the competition. Whereas the French market is booming, levels of debt are well below that of a UK company and the level of profitability is excellent. They (the French) seem to be able to finance growth out of normal cash flow," says Pattison.

Any entrepreneur wanting to cast their net over the Channel now has the perfect solution. Not only does the analysis carry a complete financial profile of every one of the Top 391 French metal treatments companies, it also carries directors' names, fax and telephone numbers.

The guide to top 391 French metal treatments companies is printed in English and analysed in Euros. The layout is exactly the same as that of the UK Top 1,000 analysis and each of the Top 391 French companies is analysed through the Plimsoll model.

The analysis is believed to be ideal, if you are looking to seek out French acquisitions or identify new trading partners.

Further details are available from: Plimsoll Publishing Ltd. Tel: +44 (0)1642 626400; Fax: +44 (0)1642 626410; E-mail: plimsoll@dial.pipex.com; Web site: www.plimsoll.co.uk