M & A Strategy a Global Endeavor, Expert Says

As technology has broken down boundaries, it has become more important for Oklahoma business people considering buying or selling a company to look worldwide, said Scott Klososky, former CEO of three successful startup companies.
“If you are looking to sell your company, or you are looking to acquire a company, it is intelligent to look a little bit more globally,” Klososky, an Oklahoma City resident who will be the keynote speaker at a mergers and acquisitions conference being brought to Tulsa by The M&A Source, the largest international organization of M&A intermediaries representing the middle market.
The conference, “Keys to Successful Acquisitions for Corporate Growth,” is for business owners and their key advisers and will be held March 28 at the Doubletree Hotel at Warren Place, 6110 S. Yale Ave.
“If I was going to sell my company in the U.S., there are probably more reasons for people overseas to buy it than there are reasons for companies in the U.S. to buy it,” Klososky said. “You have to think that way, and you have to think, ‘OK, in what country would my company or my organization be more valuable and why, and who in the country might be a potential acquirer or who should I be acquiring.”
M&A strategies “look like two different ends of the spectrum,” he said.
“One end of the spectrum is I want to sell my company, I have built it for 20-30 years and I want to sell it, or the market is dictating that I sell it, because if I don’t it is going to lose value for the next five years because of the Internet,” he said.
In that case, the world of buyers goes up when you look outside the U.S. borders, and potentially the dollars involved could go up as well, Klososky said.
“It makes a lot of sense to not just look in the U.S. if you really want to make more money on the sale,” he said.
But if a business wants to build a company through M&A, “that’s a whole different thing,” he said.
Examples would be making a company more profitable with scale, or taking advantage of a large customer base by buying a company with other products and selling them those products, Klososky said.
“There has to be a strategy there that says there is a reason for me to take the risk of doing a merger or acquisition,” he said. “Once you have the reasons, then one of the things you have to look at pretty quickly is at what point does it make sense to do something domestically, and at what point does it makes sense for me to do something internationally.”
It might not make sense for a $2-3 million Oklahoma company to try to buy a company in Germany, he said.
“We have not achieved the scale yet. We don’t have the resources yet. That is going to be a pretty big distraction – doing business, even in the Internet age, and having an office in Germany,” he said. “Maybe it makes sense to do some acquisitions in the U.S. and get up to where we are $10-50 million size, and then we look at going international.”
State businesses are no strangers to playing the M&A market as a way to grow, Klososky said.
“Oklahomans are very pioneer-oriented. They are willing to take a lot of risk,” he said.
Firms can use the growth strategy to capture their niche in the worldwide economy, he said.
“It is a very powerful strategy when done right, and in this day and age it makes sense to use M&A to get the scale, or to use M&A to become a market leader in a category,” he said.
But he cautioned that M&A is difficult and that businesses should seek help to pursue the strategy.
“It can be a treacherous strategy. Lots of books are written about the fact that 80 percent of M&A fails to live up to what people are expecting of it,” Klososky said. “There is a reason for that. It is powerful, but it is very complicated. There are a lot of landmines, so you really have to assemble the right team of help if you are a business owner to make sure that you get it done right.”
The M&A conference is presented by Rob Firestone and John C. Johnson, co-owners of Tulsa M&A intermediary firm Bluestem Resources Affiliated Group, LLC, 2642 E. 21st St., Ste. 285.
Sponsors include SpiritBank; Eide Bailly LLP; The University of Tulsa Center for Executive & Professional Development; Tulsa Metropolitan Chamber of Commerce; Oklahoma State Chamber; Tulsa Business Journal; Key Principal Partners; Evolve Capital; Pennington Allen Capital Partners; Greenfield Commercial Credit; Svoboda, Collins LLC and Trinity Hunt Partners. ?

Cost of the conference is $195 for registration before March 23 and $225 after with registration at the door only. Register online or download the PDF registration form from www.masource.org. For more information, call 888-686-4222 or email admin@masource.org.
BOKF Buys Worth Bancorp.
BOK Financial Corp. has agreed to acquire Texas-based Worth Bancorporation, Inc. The transaction has been approved by both the BOK Financial board of directors and the Worth Bancorporation board of directors.
The acquisition adds locations and employees in Tarrant County, an area where BOK Financial’s subsidiary Bank of Texas has enjoyed strong results from its single branch. Worth Chairman and Chief Executive Officer Robert Semple said Worth’s shareholders and customers will benefit from the combination.
“BOK Financial shares our commitment to providing personalized customer service, and our clientele will benefit from expanded products and services,” Semple said.

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