There are plenty of examples of merger and acquisition activity going on right now — some traditional, others less so.
Emabond Solutions, in Norwood, supplies welding technology to the plastics industry for functions such as water filtration, plumbing, recreational vehicles and medical devices. Steve Chookazian and a partner acquired the company in a management buyout in 2006 and sold it in November of 2012 to a Michigan company, T.A. Systems, that makes industrial automation equipment.
"Strategically, it's an ideal fit," said Chookazian, who is staying on with the company. As a small company with 20 employees, Emabond had limited technical resources. "Now, we can be much more innovative and creative, in terms of what we offer our customers," he added.
The deal was a classic strategic acquisition in which a company expands by acquiring a firm within its own industry. "All it takes is one motivated strategic buyer that really sees the value and is in the position to acquire a business," Chookazian said.
On the other side is Neil Levine, a partner in the Marlton office of the accounting and consulting firm Friedman LLP, who advises private companies that go public via a "reverse merger." These are firms that acquire the shell of a dormant public company then sell stock to private equity firms, hedge funds and other investors to fuel their growth.
"Last year and this year, we are seeing a lot more activity — there is money to be had," Levine said. The stock market's rise to near-record levels is enabling private companies to go public, then use stock as currency for acquisitions.
"There are a lot of good private companies out there," he said. And once they go public, "if their stock goes up, they need less stock to purchase another company."
One of his clients is a food company that is going public via a reverse merger and will use some of the capital raised from the stock sale to buy a food processing plant in New Jersey. "They should be doing $100 million a year in sales by the end of this year," he said.
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