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Published byMelissa Randall Modified over 8 years ago
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May 10-12, 2005 Patrick Brenden Patrick of Home Run Software Services, Inc recently purchased Duplication Masters, describing how acquisition is a way to expand your business.
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May 10-12, 2005 Patrick Brenden Home Run Software Services, Inc. of Huntington Beach, California signed an agreement to acquire Duplication Masters of Santa Ana, California. While Home Run and Duplication Masters have been worthy adversaries in the competitive media services market in Southern California for many years, the two companies have also enjoyed a mutual respect for the special talents, capabilities, and success of one another. Home Run was founded in September of 1992 by Mr. Patrick Brenden while Duplication Masters was formed at the same time by Ms. Louette Glabb. And, while these founders have been friendly rivals for many years, they have, over those years, developed a trust for one another, a trust which has brought these two excellent companies together now. Duplication Masters' strength in media silk screening brings a new capability to Home Run which, in combination with Home Run's existing strengths including in-house graphics, CD & DVD authoring services, expansive duplication and fulfillment capacity, and short lead times, will make Home Run one of the big hitters in the media services market. Integration of the two companies is expected to be complete no later than mid-April and we welcome any questions or comments.
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May 10-12, 2005 IDDA @ MediaTech 2005 Once upon a time… when the little fish ate the littler fish… and why…
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May 10-12, 2005 Preface… Patrick W. Brenden Owner & CEO Home Run Software Services, Inc. (The Little Fish) March ’05 Home Run acquired 100% of the stock of Duplication Masters (The Littler Fish)
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May 10-12, 2005 Why did it happen? 1. Price was right 2. Terms favorable 3. Good strategic fit 4. Trust between parties
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May 10-12, 2005 1. The Price… Seller’s valuation was realistic DM was losing money but not because of GM Combined ops would cut 70% of DM payroll (20-25% of revenue) Combined ops would cut out DM facility costs (10% of revenue)
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May 10-12, 2005 2a. Terms – financing… SBA financing (60%) – 10 years Seller financing (10%) – 1 year Buyer cash (30%)
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May 10-12, 2005 2b. Terms – structure… Stock sale (not Asset Purchase) Cash & A/R (25% of asking price) Equipment (20% of asking price) Inventory (5% of asking price)
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May 10-12, 2005 3. Strategic fit… Elimination of local competitor DM & HR customer bases similar DM & HR customer bases different Cross selling opportunities: DM does silk screening HR does authoring & fulfillment HR has much greater capacity
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May 10-12, 2005 4. Trust… Owners were “friendly rivals” Owners knew each other Owners had high integrity
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May 10-12, 2005 What does it all mean? Increase of 50% in revenue Increase of 5-10% in GM Bottom line results: 25-30% of acquired sales revenue Expected payback: 18-24 months
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May 10-12, 2005 Moral of the story… Little fish sometimes grow into big fish… There’s always a bigger fish out there… …And, that’s called an Exit Strategy
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May 10-12, 2005 Patrick W. Brenden Pbrenden@home-run.com (714) 901-0109 Home Run Software Services, Inc. www.home-run.com Duplication Masters www.duplicationmasters.com the end…
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