OUR THOUGHTS ON:

International Buyers Seeking U.S. Companies

International

By Peter Lieberman

As the G-20 heads of state travel through Western Pennsylvania later this month, many will observe some very familiar corporate logos. Why? Because those logos represent Pennsylvania-grown, but internationally owned, companies with headquarters in Germany, Japan, the U.K. and numerous other countries.

How did they get here? Mostly by acquisition.

Cross-border acquisitions of U.S. companies more than doubled from 2004 to 2007. Certainly, the global economic environment has reduced activity, but even at this year’s pace, acquisitions of U.S. companies by foreign buyers will make up a substantial portion of U.S. M&A activity.

Despite the economy, the underlying drivers behind this activity remain in place. The dollar continues to trade at historical lows vs. foreign currencies such as the Euro and Yen, giving buyers in those countries extra purchasing power. U.S.-based operations provide overseas companies access to an enormous market and the potential to diversify exposure to their own economy. And if executed competently, an acquisition provides entrance to the U.S. market with longstanding operations, strong management, well-trained workforces and well-known brands in place.

The take-away: if you are contemplating a sale of your business, don’t restrict your pool of potential buyers to U.S.-based firms. Overseas-based companies were the acquirers in Schneider Downs Corporate Finance’s last two sell-side deals. In particular, manufacturers of proprietary products and business service firms tend to be good candidates for an overseas buyer. But you don’t need to be selling internationally or generating billions in revenue to attract an international buyer.

Peter Lieberman is Managing Director of Schneider Downs Corporate Finance, LP.


Schneider Downs Corporate Finance, LP is a registered broker/dealer.

Member FINRA/SIPC.

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