Acquisitions and Consultancy Services Provided by Equity Investment Firms
Consider an industry situation, wherein a company that has the capability to perform at par, yet it is unable to do so, due to lack of funds. In such a situation, if there is no one to invest in the company, then the economy will lose out on a successfully performing production unit. In such a situation, the ideal business activity would be to approach a portfolio investment or an equity investment firm. The portfolio companies before acquiring a firm consider the business proposition and feasibility of the project. If the equity investment company is assured of the profitability of the firm, then it would acquire the enterprise and provide it with a brand value. This value proposition is essential to convert the acquired firm into a successful business establishment.
Miles Arnone MA, personally has overseen many acquisitions as the managing director of American Capital Technology Group or Cannon Capital. Cannon Capital has been involved in many acquisition, mergers and even investment in middle order business houses for nearly a decade. The company’s is an aggressive portfolio investment firm with a dedicated team in the management of the enterprise. Cannon capital has also been involved in many successful acquisition, from which it has received worthwhile dividends. The company has also been thoroughly involved in the business activities of the companies that it has acquired.
Some of the activities carried out by portfolio firms with regard to acquisition and consultancy are as follows:
- Management of acquired firm: According to Miles Arnone MA, once an equity investment firm has acquired a company the work of the parent firm begins. Arnone opines that the equity investment firm, in this case Cannon Capital will be completely involved in the management of the acquired firm. The portfolio company will be responsible for the smooth working of the acquired firm. If required the company can change the management of the acquired firm to ensure higher levels of productivity.
- Consultancy services: On the most important business activity carried out by portfolio firms is consultancy services. Arnone believes that this consultancy services are twofold. If a portfolio firm has acquired a company on its own accord, then the owning company will provide consultancy services with regard to improving the business activities of the acquired firm. This is essential to ensure higher levels of productivity.
- Third party consultancy services: Portfolio firms also provide third party consultancy firms to other companies regarding acquisitions and mergers. According to Arnone, these consultancy services are carried out after thorough market study. Based on the results and market analytics the portfolio firm will provide advice with regard to suitable mergers and acquisitions.
Thus, equity investment firms play a crucial role in the industry itself. These firms are one of the most genuine consultancy service providers with regard to mergers or acquisitions. Additionally, portfolio firms have vested interest in the progress of an acquired firm. Finally, industry observers opine that with the growth in the number of portfolio firms, business investment and funding also improves.