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Letter of Intent

Nonbinding document through which both the acquirer and the target publicly express their intent to complete the merger or acquisition transaction.

Leaseback

Transaction by which a company sells an asset to a third party to then lease it back or pay a fixed fee for use.

LBO

See Leveraged Buyout.

Joint Venture

Separate entity formed by the partnership of two companies. This entity is generally used to develop a new technology or process, which would help both companies.

Joint Purchasing Agreement

Agreement between two companies to combine purchases of raw materials or other resources to achieve economies of in purchasing.

Industry Attractiveness-Strength Matrix

Matrix for comparing business units of a diversified firm on the basis of industry attractiveness and the competitive strength of the unit within that industry.

Hostile Acquisition

Acquisition of a target without the target’s board of directors approving of the acquisition.

Horizontal Merger

Combination of peer firms at the same level of the production process in an industry.

BCG Matrix

See Growth Share Matrix.

Growth Share Matrix

Matrix used for strategic analysis with Market Growth Rate along the vertical axis  and Relative Market Share along the horizontal axis. The matrix groups business units into “Dogs,” “Question Marks,” “Stars,” and “Cash Cows.”