Benchmark Final 031405

Creating Value through Strategic Acquisitions If you’re planning to acquire another company, it’s essential to take time to assess the impact of the deal on your succession and estate plans. By James J. Kirlin Jr. and Stephen R. Raymond If you are like most owners of privately held and family businesses, the value of your company represents about 80% to 90% of your overall net worth. Properly planning for the growth of the business -- including acquisitions -- is critical not only for the long-term success of the company but also to optimize your personal wealth. Your company’s strategic plan should be carefully integrated with your business transition and wealth transfer planning. Yet many business owners haven’t bothered to do any planning. In a 2004 study we prepared for a national industry group, fewer than 20% of the private business owners who responded had a written strategic plan, and more than 60% had no formal succession plan at all. Many business owners are too caught up in day-to-day operations to drill down and explore all their needs. Family businesses today face two major challenges. First, many industries are consolidating. Margins have been compressed, overhead costs have increased and the competitive marketplace is volatile. Second, there are new tax laws that affect succession and wealth transfer planning. The Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs Growth Tax Relief Reconciliation Act of ...