a new type of re-casting offer: strategic positioning

When Main Street companies go up on the sales block, financials are re-cast
to portray themselves in the best possible way for potential buyers.  This makes sense of course — sellers want to look as attractive as possible to attract buyers and buyers want to know the specifics of best-case cash flow.

Companies being scrutinized by Private Equity Groups –PEGs — do the same. (although the value of PEG targets often starts at $10-20M, an amount typically higher than ‘Main Street’ busineses)

There can be a different type of re-casting and it can be part of a formal business brokering process.

This new type of re-casting would be an examination and expansion of a company’s strategic positioning.  Strategic repositioning would be narratives that describe, convincingly, how the company being offered for sale (or that is under investigation as an investment target) is robust and how it could, with the right kind of preparation, survive and prosper in various business environments.

In the former case, it’s sellers: Companies ensure that in their “book” (M&A book), they have achieved the right strategic position to show the opportunity to the fullest to get the highest level of interest and valuation. In the latter case, it’s buyers (PE groups) evaluating prospective targets.

As far as I know, no-one is doing this service. Yet.

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    • J Aiken
    • October 8th, 2008

    Hmm. I work for a well-known managment consultancy (which will remain un-named) and its funny, but what you’re suggesting is one of the adjunct services we offer for M&A advice. Mind you, our clients tend to start at the $50-75M range and our fees are standard we-don’t-pick-up-the-phone-for-less-than-$100K consulting rates, BUT, I’ll tell you clients have given us good feedback. We use some pretty sophisticated economic modeling tools. I’m not sure what methods you’re suggesting for much smaller companies.
    Thank you. JA

  1. J-A, thanks for the comment! Without writing more than’s reasonable for a quick reply, what I’m thinking of is a very quick-and-dirty version of something called (if bookishly) “scenario planning.” Quite simply, it’s an approach based on the idea that no-one can predict the future. No-one. That said, reasonable people can come up with a handful of PLAUSIBLE futures. And it’s the “handful” that’s key here.

    -SO …(1) Strategic ‘recasting’ would start out with brief descriptions of different business environments that could exist in 2 or 3 or 4 years. COULD exist. No probability statements. (2) Using these different plausible descriptions as backups, the exercise is to figure out – for EACH of these business environments – who its competition will be, what the areas future growth will be, where the client company will do well, how it will struggle, and why it will thrive.

    At the end of a two or three hour workshop is a list of strategic options; short term opportunities and longer-term directions that show potential buyers or investors that the target company has thought about ways to prosper no matter which way the economy shifts.

  2. This might be a new-ish sounding name, but a quick Google search suggests ‘strategic recasting’ is an idea (and — term) that’s been around at LEAST since the late 90s.

    see: http://www.hoffman.com/inthenews/articles/wsj_feb22_99.html

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