M&A - An Effective Tool To Enhance Growth

Mergers and acquisitions are an effective and efficient substitute for R&D for companies that need help combating shrinking market share or stagnant growth. In some cases, companies are confronted with fierce competition from startups and utilize M&A as a way to “outsource” R&D and leave the risk of innovation to startups that tend to excel at R&D. Many of these companies are skipping R&D almost entirely by acquiring other companies. This trend is true in almost all industries and many of the transactions are cross-border.

The chart below depicts the top three sectors for cross-border M&A.

In recent months, Samsung has been actively involved in M&A deal making as a way to instantly build up its capabilities in emerging technologies such as mobile payments, cloud-based services, and artificial intelligence.

Samsung’s planned purchase of U.S. autoparts supplier Harman International Industries Inc. for US$8 billion in an all-cash deal that instantly makes Samsung a major player in the world of automotive technology. It’s an excellent example of a company that is using M&A to expand. This deal will be South Korean smartphone maker’s biggest acquisition in history.

M&A in general and cross-border M&A in particular, is a well-proven way to enhance shareholder value, either by acquisitions or divestitures. While most of the press is focused on the large transactions, middle-market companies can also utilize this “tool” to make defensive or offensive acquisitions or divest businesses that no longer fit the company’s strategy.

The chart below demonstrates the growth of cross-border M&A deals from Q2 2016 to Q3 2016.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 25, 2016

The importance of M&A As a Tool to Adapt to Changing Business Environments

To succeed in the current business environment companies will need to develop a keen sense of agility to grapple with the slow and uncertain economy, political risks, the threat from new entrants with more creative and efficient business models, etc.  It is widely recognized by CEOs that to respond to today’s marketplace organic growth is far from enough because most transformational technologies are outside the core competency of the average organization.  According to KPMG, CEOs are pursuing a range of activities in search of growth, which are listed below.  For each activity, the percentage indicates what percentage of CEOs will think about that particular action.

M&A, including minority investments, is expected to play a major role as companies search for new and valuable business solutions. Companies that are able to be proactive in terms of technological and business model disruptions will greatly enhance their chances of success, profitability, and longevity.  With regard to the US presidential election, and as Warren Buffet said, the market will move forward with either candidate who happens to get elected as President.  The country will survive and business will survive.  Succinctly, M&A will go on regardless of political uncertainty.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

October 4, 2016

Global M&A: Mexico

Regarding Global M&A, Latin America has moved into the spot light for investors.  Both private equity firms and strategic buyers are realizing the potential this location holds, and as of late, Mexico has been of great interest.  Over the past few years the Mexican government has made a big push to increase investment in its country.  Mexico has specifically targeted foreign investors by working hard to address corruption, labor, and tax issues.  Additionally, laws have changed to allow Mexico’s pension funds to invest up to ten percent of their assets in private equity, which will promote economic growth.

Despite new investment, as a whole, Latin America is still struggling.  Brazil is currently in a recession, and Columbia’s GDP growth rates are low.  While these economic problems are of great concern to locals, it allows foreign investors to capitalize on both the exchange rates and discounted assets and companies.  These investors see an opportunity to buy low and sell high.  The World Bank recently announced that by 2030, fifty percent of the population in Latin America will be middle class.  This fact alone has provided investors with confidence that the economies will continue to grow and bounce back in the coming years.

Mexico is popular due to its strategic location.  Not only do the time zones correspond with the United States, but its location is unbeatable.  For firms that are looking to expand supply chains abroad, Mexico is a perfect fit.  As compared to China, producing in Mexico greatly shortens the supply chain, and is generally less expensive.  Coincidentally, China is currently experiencing an overall decline in local manufacturing.  Businesses selling to consumers in the United States are looking to keep supply chains as short as possible, and Mexico is becoming the cheapest and easiest way to do it.

Strategic buyers are not the only group interested in Mexico; private equity firms are moving in too.  The volatility in the region is attractive, especially for investors who have a longer time horizon.  Experienced investors are making purchases not bothering to worry about short term problems, but rather focusing on the long term gain.  Mexico has now surpassed Brazil as the most popular destination for private equity investment in Latin America.

All in all, over the last 10 years the focus of M&A in Latin America has changed significantly.  Argentina was previously a hot spot for deals; however, Brazil then started to gain popularity and most of the investment activity.  Brazil is still very exciting for foreign investors as they are able to buy companies at deep discounts, but now investors are also exploring Mexico.  Another country that currently presents unique investment opportunities is Chile, which may provide more stability than other Latin American countries.

Versailles Group is a 29-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

August 9, 2016

M&A Selling or Offering Memorandum

When selling a business, it is important to think about the best way to present the business to potential buyers.  A key step is to make sure that the presentations and documents that are used are tailored to the audience, i.e., the buyers or investors.  An M&A Selling Memorandum that goes into too many technological details, for example, will not interest potential suitors.  People who are thinking about investing money in a company will be more likely to consider a company with a document that addresses their various concerns.

The best way to inform buyers about a business that is for sale is via an M&A Selling Memorandum, which is usually called an Offering Memorandum or Confidential Information Memorandum (“CIM”).  This document should outline all of the basic information about the seller’s company, especially the unique selling points.  However, despite the fact that buyers will execute a Non-Disclosure Agreement (“NDA”) to receive the information, it is important not to give out confidential information that could be used by competitors.  Highly confidential information should be shared with the buyer during due diligence and should not be included in the selling memorandum.  At the risk of being redundant on this point, it is important to have potential buyers sign a Non-Disclosure Agreement before they receive the selling memorandum.  And, the selling memorandum should include a copyright notice, as well as a note stating that the reader is subject to the terms and conditions of the NDA.

A quality selling memorandum will answer basic questions about the company, e.g., where it’s located, who owns it, a description of the products or services, customer information, number of employees, location and cost of facilities, etc.  It will also explain why it is a good investment.  Furthermore, it will include information about the company’s history and growth potential, and explain why the business is being sold.  In conclusion, the importance of this document should not be underestimated.  It is the seller’s best chance to generate interest in the business and help buyers understand the company’s potential.

It is obviously crucial to focus on the best aspects of the business, but it is equally important not to leave out any potentially negative features.  Everything needs to be true and verifiable, and buyers will lose interest if they discover hidden problems further down the line.  Of course, there may also be benefits that are not immediately obvious from the financial information.  Revealing both the good and the bad demonstrates the benefits of purchasing the company while also demonstrating to the buyer that the seller is trustworthy and that there will not be any surprises later on.

The selling memorandum should be prepared by a well-experience M&A advisor.  This way, the seller can make sure that its selling memorandum conveys all the information a buyer will need to make an offer that will excite the seller.

Versailles Group, Ltd.

Versailles Group is a 37-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at  www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

President

617-449-3325

March 17, 2016

There are many reasons why owners may want to sell a business quickly. Health issues, looming tax changes, shifting market dynamics, or operational fatigue can all create urgency. Although the desire to quickly sell a business is understandable, haste in the M&A process carries its fair share of risks.

Versailles Group, with almost four decades of experience advising business owners on complex transactions, has seen this dynamic play out many times. Experience shows urgency should never come at the expense of maximizing outcomes.

What Owners Risk by Rushing a Sale

The most obvious risk of an accelerated process is a potentially lower purchase price. Finding and approaching interested parties is a delicate and time-consuming procedure; by rushing through a transaction, you risk passing over the “right buyer.” In several transactions, we have seen strategic acquirers ultimately pay significantly more once given time to evaluate synergies.

Strategic acquirers, who often pay the highest premiums, usually require more time. A capabilities-driven M&A approach is proven to deliver stronger shareholder outcomes: a PwC study of 800 acquisitions found that deals with high strategic fit generated a 14.2 percentage point higher annual total shareholder return (“TSR”) compared to deals lacking such alignment (PwC Report).

We’ve seen the same dynamic firsthand. In one particular transaction, a buyer from South Africa ultimately outbid domestic buyers by 2.5x. That premium was only possible because the process allowed for proper positioning and global outreach. Compressing the timetable would have eliminated the opportunity altogether.

Speed can also create the wrong perception. Buyers may assume urgency signals hidden problems in the business, which can reduce trust, depress valuations, or even scare off potential bidders. Managing the narrative is critical. Versailles Group has repeatedly mitigated this risk by preparing documentation in advance, ensuring transparency, and running a structured process that preserves competitive tension even under tight deadlines.

Finally, a rushed process undermines due diligence. Serious buyers, especially those willing to pay a premium, expect well-organized financials, operational data, and legal documentation. If sellers rush, errors or inconsistencies are more likely to surface, which can reduce buyer confidence, lower valuations, or even derail a deal entirely. A compressed timeline often leaves sellers reacting to buyer requests instead of proactively managing the process, which shifts negotiating leverage away from the seller.

Early Exit Planning: The Solution

Urgency often stems from delayed exit planning. This is a situation that can be avoided entirely. In another Versailles Group blog, “Planning to Exit Your Business?,” we discussed how business owners can start preparing for their eventual sale well in advance, smoothing the path toward a successful transaction. By planning ahead, owners avoid scrambling at the last minute, reduce the risk of value erosion, and retain the flexibility to choose between a fast exit or a longer, value-maximizing process.

Balancing Speed and Value

Owners facing urgency still have options to protect value if they approach the process strategically. Versailles Group has developed a disciplined approach that enables owners to move quickly while still protecting value.

The first element is efficient preparation. By anticipating the need for speed, sellers can work with advisors to prepare materials such as non-disclosure agreements (NDAs), confidential information memoranda (CIMs), and data room contents well in advance. This ensures that even under a speedy process, there is not much sacrifice in quality.

The second element is global reach. Versailles Group’s experience demonstrates that the highest-value acquirers are often not local, and not even domestic. Accessing international buyers requires established networks and targeted outreach. Even under tight timelines, ensuring exposure to the right pool of buyers can mean the difference between a fair offer and a premium one.

Finally, disciplined process management ensures speed doesn’t become chaos. A well-structured process compresses timelines for indications of interest, management meetings, and due diligence, while still maintaining competitive tension. Done properly, urgency can create momentum rather than suspicion.

Meeting the Needs of Different Sellers

Ultimately, not every owner has the same priorities. For some, speed is the overriding priority, and a fair price achieved quickly may be the right answer. For others, maximizing value is paramount, even if it requires more time. Versailles Group has executed both strategies successfully and observes that most clients prefer an approach between the two extremes. Regardless, owners should make this decision consciously, with full awareness of the trade-offs. Selling quickly is not inherently wrong. What is risky is selling quickly without understanding what is being sacrificed.

Conclusion

Urgency is sometimes unavoidable when selling a company, but speed doesn’t have to mean sacrificing value. With the right preparation, process, and advisor, it is possible to sell efficiently while still maximizing value.

For business owners considering a sale, whether immediately or in the future, the message is clear: prepare early, understand the risks of rushing, and partner with the right M&A advisor to safeguard both speed and value.

Written by Donald Grava

Originally published: 14 July 2015

Last updated: 18 Sepember 2025

Versailles Group, Ltd.

Versailles Group is a 38-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at

www.versaillesgroup.com

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

For an owner of a middle-market private company, hiring an experienced boutique investment bank is crucial when considering the sale of your business.  Professional M&A advisors with decades of transaction experience not only help determine your company's true market value but also implement strategies to maximize that value throughout the sales process.  Just as importantly, the right advisor helps secure favorable terms, which is often overlooked when sellers focus solely on price.  In reality, a successful M&A transaction involves far more than valuation alone. 

Considerations Before A Sale

Optimal Timing for Your Exit

One of the most critical decisions entrepreneurs face is determining when to sell their business.  Many make the mistake of delaying a sale to implement "one more improvement," such as launching a new product line or developing an additional sales channel.  While these initiatives may seem beneficial, they often cause owners to miss peak market conditions, overlook emerging competitive threats that could reduce value, or delay unnecessarily as industry dynamics shift.

Another common mindset we have seen is anticipating another year of strong growth, prompting owners to miss the optimal window to sell.  Markets fluctuate, regulations change, and personal circumstances can unexpectedly force a sale under significantly less favorable terms.

The best exits occur when your business is performing well and you can sell from a position of strength, not under external pressure.  It’s important to hire an M&A advisor who will analyze market trends, industry consolidation patterns, and your company's growth trajectory to identify the optimal selling window before value deterioration occurs.  In other words, taking a proactive approach enables you to control both the timing and the narrative presented to buyers.  

Preparation For Sale

Another important point to consider is preparing the company for sale.  Some of the items that should be included are: organize financial records and clear up any issues with customers, employees, suppliers, etc., streamline operations and reduce owner dependence.  Most importantly, the potential seller should resolve any legal and compliance issues that are outstanding.

Confidentiality Protection

Business owners should carefully consider how confidentiality will be maintained during the sales process, as it is critical to preserving business value.  An experienced M&A advisor can help by putting robust non-disclosure agreements in place, preparing anonymized marketing materials to protect your identity in the early stages, and using a strategic approach to buyer outreach that minimizes competitive risks while maximizing value and favorable terms.

Market Approach Strategy

You'll need to determine whether a broad marketing approach (contacting numerous potential buyers) or a targeted approach (approaching select strategic acquirers) best serves your objectives.  This decision should weigh the likelihood of achieving maximum valuation through competitive tension, industry-specific confidentiality concerns, the strategic fit with specific buyers who might pay premium valuations, and timeline considerations.  Included in this analysis will be management bandwidth constraints.  A good M&A advisor can help weigh the pros and cons of the various approaches.

Considerations During A Sale

Preparation for Buyer Meetings

Before buyer engagement begins, your M&A advisor should help you anticipate likely buyer concerns and prepare detailed responses, address potential red flags with appropriate context and remediation plans, and maintain operational focus.  Being thoroughly prepared to address questions about operations, technology, human resources, and financials is essential for maintaining deal momentum and credibility.  Building credibility with the buyers is essential to achieving a successful outcome.

Negotiation Strategy

Expert negotiation is critical to maximizing value beyond just the headline purchase price.  Key considerations include purchase agreement structure and terms, working capital adjustments, earnout provisions and their achievability, representation and warranty terms, non-compete provisions and their scope, and post-closing operational requirements.  Each of these elements can significantly impact the final value you receive from the transaction and should be carefully negotiated with professional guidance.  In this regard, your M&A advisor will team up with your attorney to not only protect your interests but also to maximize the valuation and contractual terms.

Exclusivity Period

Once a buyer submits a strong offer and you move into due diligence, they will typically request an exclusivity period (also known as a “no-shop” provision).  During this period, which usually lasts between 30 and 90 days, you agree not to negotiate with other potential buyers while the buyer conducts a thorough review of your business.

Exclusivity is a standard part of M&A transactions, but it does shift negotiating leverage toward the buyer.  For that reason, it should only be granted once a buyer has demonstrated real commitment via their actions and through a strong purchase price and favorable terms.  It is also important to negotiate a reasonable time frame and to keep the process moving efficiently with a well-prepared data room and responsive communication.

When managed properly, the exclusivity period can create focus and efficiency, helping both parties progress toward closing.  When handled poorly, it can result in wasted time, reduced negotiating power, and missed opportunities with other interested buyers.

Considerations After A Sale

Integration Planning

After completing the M&A transaction, focus shifts to integration and operational continuity.  Even when departing, sellers play a vital role in facilitating smooth leadership transitions, helping retain key employees through the change, ensuring customer relationships remain stable, and preserving the company culture that's been built over time.  A thoughtful transition preserves the entrepreneurial legacy while positioning the company for continued success under new ownership.

Legacy Protection

Your M&A advisor should help you develop appropriate transition strategies that protect the interests of loyal employees, maintain quality standards for longtime customers, honor commitments to business partners and community stakeholders, and safeguard the reputation you've worked decades to build.

Conclusion

In summary, selling your business represents the culmination of years of entrepreneurial effort. Working with experienced M&A advisors who understand the nature of transactions provides the expertise needed to navigate this complex process successfully.

For expert guidance on middle-market M&A transactions, please contact our experienced team of investment bankers who would be happy to discuss your objectives on a confidential basis. Such consultation will be performed at no cost to you.

Written by Donald Grava

Originally published:  29 Jul 2015

Last updated:  21 August 2025

Versailles Group, Ltd.

Versailles Group is a 38-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at

www.versaillesgroup.com

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

M&A Deals - Failed Acquisitions

Why Do Some M&A Deals Result in Failure?

After the closing of an M&A deal, it is up to the buyer to ensure the success of the transaction. However, it’s only fair to say that not all of the work comes post-closing! In fact, the most successful buyers expend a lot of time and effort before the closing.

There are several reasons why acquisitions fail, but this generally occurs for two primary reasons. The first is that the buyer was overly optimistic about the potential synergies of a transaction. Thorough due diligence and analysis, before closing, is imperative to avoid these types of failures. Second, and this happens more than we’d like to see, the buyer is not able to competently manage the newly acquired business or underestimates the amount of time the transition will take.

When the buyer is overly optimistic about possible synergies with the target company and possible economies of scale, it can lead to a failure. Similarly, if the newly acquired company’s products or services do not grow as anticipated, there’s a chance for failure. Furthermore, if the buyer has underestimated the strength of the market competition, the amount of capital needed to grow the business, or other associated costs related to the transition of ownership or overestimated potential cost savings, it will be very difficult to ensure the success of the newly acquired company.

If the buyer is unable to properly manage the business it will almost certainly lead to a failed acquisition. The management team needs to have a strong understanding of the business being acquired. Furthermore, the acquiring company needs to make sure that it retains key management and other employees to ensure the operations run as planned. If the corporate cultures of the acquiring and acquired companies are vastly different, it can lead to poor chemistry between the employees of the two companies, which can cause tension in the workplace. This tension deteriorates the team effort and can cause financial losses.

In order to complete a successful acquisition, thorough due diligence is an absolute must. Such diligence must include a complete assessment of the buyer’s own strengths and weaknesses and a detailed analysis of the expected financial results. While there are too many conflicts of interest to have your investment banker complete the due diligence, the bankers are certainly well equipped, or should be equipped to help guide the process. A well experienced investment banker certainly knows about the potential pitfalls related to doing an acquisition and can help the buyer avoid them. When the proper diligence and analysis is done, the result is a successful acquisition.
M&A deals can be exhilarating for both the buyer and the seller, if done properly.