Acquisition Value Proposition - Sarah Gerdes



Acquisition Value Proposition For [potential buyer]

INTRODUCTION

Describe your firm in one sentence.

Example:[Your Company]’s flagship products… say what the product is and what it delivers in quantitative terms. No more than two sentences.

Describe your competitive advantage. Why they care.

Leading firms in [acquiring company’s market] have validated the performance of [Your Company]’s technology in recent internal tests (under NDA). This includes (name here) if this is true.

Describe what you want. This may be an acquisition or a strategic partnership if the terms are better.

[Your Company] is currently evaluating opportunities for an acquisition or strategic partnership with a leading player in either the [add the markets of most interest to the target acquiring company].

BUSINESS OPPORTUNITY

In one paragraph, identify the product or technology is strategic to the target buyer. No more than three sentences.

[Your Company]’s product (or service) substantially improves the performance of, add the benefits here. .

[TArget Acquiring Company] Business and Value Proposition

[Your Company]’s product (or service) is of interest to [TARGET ACQUIRING COMPANY] for two primary reasons. The first is strategic while the second is a tactical advantage.

Strategically, [TARGET ACQUIRING COMPANY] gains a [product/service] that gives…. add here—use words like unrivalled but be able to back the claim up,[TARGET ACQUIRING COMPANY] a way to compete with and substantially out perform any [type of product or service] solution on the market today and do so at much lower cost points. This translates into a key competitive advantage that can be exploited either stand-alone or integrated with other [TARGET ACQUIRING COMPANY] offerings (also applies to [TARGET ACQUIRING COMPANY]s packaged [type of] solutions).

In addition [Your Company]’s [product] could have a direct impact on sales, which is the second, and tactical benefit Specifically, just looking at the installations of [TARGET ACQUIRING COMPANY] own products, it states as [number here if you have it]. Taking a conservative guess that [add percentage] is [number of units]. The equivalent revenue would be around $0M US (at a low price point of $estimated selling price) with $0M in profits. Furthermore, that does not include additional [value add services or products].

[TARGET ACQUIRING COMPANY] has two options—an exclusive OEM relationship, which is not the ideal scenario for [Your Company], or an acquisition, which is desired. At this time, [Your Company] is in discussions with a variety of organizations to OEM, and/or sell the technology in its present state. Today, [Your Company] employs [count here] full time, with other services provided on a contractor or consultant basis only. As such, either scenario is viable for [Your Company].

Closest Comparison:

Outside [Your Company], few alternatives are available on the market today. Provide the solutions, cost and competitive advantage.

Partner Path with [target acquiring company]

[Your Company] would like to engage in discussions with both the corporate development group, as well as the continue discussions with the product management teams at [TARGET ACQUIRING COMPANY], but also [vertical or business unit groups, led by [names of vice presidents here] respectively. [TARGET ACQUIRING COMPANY] is an ideal partner candidate due to strategic direction. due to other partner discussions, the timeframe for concluding these talks is [target end date for an Letter of Intent here].

[Your company] OVERVIEW

Company was founded here. Relevant information on the product only, no information on the resumes, backgrounds of founders, board members or any other private information.

Company Acquisition Proposal For IBM

INTRODUCTION

Company is a provider of high speed solutions for aggregating massive volumes of transaction data. [Your Company]’s flagship products, Product 1 and Product 2, use advanced algorithms to enable rapid and efficient summarization of hundreds of millions of records (on low cost commodity platforms). Product 1’s peak aggregation rate is 20 million records per minute (for a simple summary) as measured on a single processor (500 MHz NT). This scales linearly (by data volume and across processors) to 1.2 Billion records per hour per processor.

Leading firms in the business intelligence infrastructure market have validated the performance of [Your Company]’s technology in recent internal tests (under NDA). This has included a ROLAP vendor, an ETL vendor and an RDBMS vendor.

[Your Company] is currently evaluating opportunities for a strategic partnership with a leading player in either the business intelligence infrastructure tools or the analytical applications markets.

BUSINESS OPPORTUNITY

With the continued rapid growth in key areas such as click stream/web usage, e-commerce and CRM the ability to deal with high volumes of transaction data is becoming increasingly critical. The demand for effective and efficient summarization will continue to play a critical role in data analysis/data mining/data processing solutions. Hence vendors that service these markets continue to create, and/or search for tools to accommodate the scale and rate of transactions required to satisfy high-end customer requirements. Until now, very high volume transactions could be accommodated, but only by very large-scale infrastructure and at very high costs.

[Your Company]’s technology (integrated and bundled with partner capabilities) substantially improves the performance of, whilst also reducing the cost of, all areas of Very Large Data Warehouse (VLDW) aggregate computations (software, hardware, development, tuning, maintenance, support and operations).

IBM Business and Value Proposition

[Your Company]’s technology is of interest to IBM for two primary reasons. The first is strategic while the second is a tactical advantage.

Strategically, IBM gains a technology that gives unrivalled scalability and performance for VLDW/eBusiness Intelligence infrastructure. As such, [Your Company] gives IBM a way to compete with and substantially out perform any data analysis solution on the market today and at very much lower cost points. This translates into a key competitive advantage that can be exploited either stand-alone or integrated with other IBM offerings (also applies to IBMs packaged analytical applications and ebusiness intelligence solutions).

In addition [Your Company]’s technology could have a direct impact on sales, which is the second, and tactical benefit Specifically, just looking at the installations of DB2, which IBM states as 300,000. Taking a conservative guess that 0.25% are large data warehouses and hence reasonable targets for Product 1/Product 2, that provides around 750 units. The equivalent revenue would be around $37M (at a low price point of $50k) with $35M in profits. Furthermore, that does not include additional high-end sales, enterprise pricing or the impact on revenue from analytical apps.

IBM has two options—an exclusive OEM relationship, which is not the ideal scenario for [Your Company], or an acquisition, which is desired. At this time, [Your Company] is in discussions with a variety of organizations to OEM, and/or sell the technology in its present state. Today, [Your Company] employs four engineers full time, with other services provided on a contractor or consultant basis only. As such, either scenario is viable for [Your Company].

Closest Comparison and competitive advantage:

Outside [Your Company], few alternatives are available on the market today. The closest comparison can be found by [competitor], which issued a press release stating its abilities to process 150M records per hour on a Sun machine with 32 processors. This solution in costs $2M in hardware and $750K in software.

Acquisition Path with IBM

[Your Company] would like to engage in discussions with both the corporate development group, as well as the continue discussions with the product management teams at IBM, but also eBusiness group and technology groups, led by [identified names] respectively. IBM is an ideal partner candidate due to strategic direction. Due to other partner discussions, the timeframe for concluding these talks is August 2002.

COMPANY OVERVIEW

Company was founded in McLean Virginia in early 2001. It’s first products, Product 1 and Product 2, were launched earlier this year and [Your Company] recently secured it’s first customer. They will be using [Your Company]’s technology to aggregate web usage data from one of the top 5 largest set of web properties. This involves click stream data from over 20 Million distinct users per day, computing 45 different aggregates in under 2 hours from up to 1 Billion records.

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