There comes a time for many business owners when the best way to grow is through strategic mergers or acquisitions. Acquiring another business as a subsidiary or merging two entities into one can be an excellent way to expand market share, control costs, and achieve other business goals. However, a business owner should never pursue such opportunities without carefully considering all of the consequences.
Mergers and acquisitions involve a number of serious financial and legal issues. For example, simply determining the market value of a business–and selecting an appraiser–requires due diligence. It is also necessary to study any liabilities that are subject to transfer, as well as any and all tax consequences.
The Associated Press has reported that a Minneapolis and Israel-based 3D printing and additive manufacturing company is acquiring two additive manufacturing services providers. Stratasys is paying as much as $295 million to buy Solid Concepts and the details of its purchase of Harvest Technologies have not been reported.
Stratasys has disclosed that it plans to combine the two acquisitions with RedEye, another one of its businesses, in order to end up with just one division in the additive manufacturing services.
The purchases are expected to close next quarter.
When a company takes a large step like this–and even when small businesses are negotiating buy-sell agreements–it is critical to ensure that the strategy is well thought-out and well implemented. Here in the Twin Cities, business owners are often wise to work with skilled business transaction attorneys during processes like these.
Source: Star Tribune, “Stratasys buying privately held Solid Concepts, Harvest Technologies,” April 2, 2014