Given that most western countries have been struggling with national recessions, it’s surprising to learn that 2010 looks set to see a major upturn in corporate mergers and acquisitions. Corporate deal-makes have been suggesting for the last few months that the first half of 2010 (potentially even longer) will see a huge surge in corporate acquisitions.
The US Association For Corporate Growth recently suggested that this anticipated increase is most likely to have an impact on the healthcare, financial services and manufacturing industries, with the latter being hit the heaviest. It also provided information to suggest that 82% of the people questioned believed acquisition and merger activity would increase dramatically this year.
One recent example is Kraft’s acquisition of Cadbury’s a huge move in the industry, particularly when both acquisitions and mergers had appeared to be at a complete standstill for the past few years. It seems that this move by Kraft could be indicative of the general change in attitude of the larger (or in some cases smaller) corporations.
Another pertinent statistic bought about by the ACG’s research is that many people expect over one quarter of those deals to be distressed deals; meaning one of the parties involved will have been forced to sell or would have gone out of business.
So in an area that’s experiencing a marked shift from previous form, how can current companies worried about distressed deals make sure they increase (or maximise) the amout their business is valued at?
Asset value is regarded as one of the most crucial elements of a companies valuation, especially during a national recession. With that in mind, one action most companies should be looking to take would be to install and utilise specialised asset management software throughout your company; allowing you to give current, valid information regarding your companies assets, their location, condition and overall value.
Having complete control over your fixed asset management data can stop any potential decrease in valuation based on asset values on average most medium to large corporations are in a position whereby around 50% of the assets on their registry are either no longer in use, or unaccounted for. This means a large chunk of the items on the asset register are being depreciated even after disposal, reducing profitability and overall valuation.