Case Studies

International Strategic Acquisitions
International Marketing
Creating a US Subsidiary
Market Diversification
Product Diversification
Product and Market Diversification
Contacts

International Strategic Acquisitions:
A French biotech company, owned by several major institutions, was to be sold to a large, privately held US company. A clash between the French CEO’s concern to preserve his company’s cultural identity and the American CFO’s more bottom-line orientation fed misunderstandings and tensions that threatened the completion of the deal.

As Nigel Warshaw has lived and worked in both France and the US, and speaks fluent French, it was possible to minimize the anxieties of the French seller in relation to the US buyer’s business and financial goals. Weekly meetings were held with the French CEO to help him to understand the opportunity rather than the threat the deal offered him at the same time explaining to the Americans that the seller’s concerns were legitimate and not simply negotiating ploys. Arrangements were made for the US buyer to retain a French speaking US attorney, currently working for a large American law firm in Paris.

With this additional knowledge and understanding, both the culture gap and the transaction were successfully closed.

International Marketing:
A German manufacturer of sophisticated equipment for imaging electronic circuits was seeking to enter the North American market.

With Nigel Warshaw’s knowledge of the North American market for electronic manufacturing equipment, familiarity with distributor contacts between Europe, the US and Canada, and an ability to speak fluent German, the client’s achievable options were assessed.

Two days were spent in Germany gaining familiarity with the equipment, the history of the business in North America, and the key players at the factory. It was agreed that, in spite of the limitations inherent in a single representation in the US, it was essential to stay within the manufacturer’s financial and human resources and that the company would need initially to seek a Master National Distributor for the USA.

Qualified North American distributors throughout the US and Canada were identified, and the most suitable presented to the client who was then helped to close an agreement with the chosen distributor. The German company went on to sell over $1 million of its equipment in its second year of operation in North America and subsequently set up its own US subsidiary.

Creating a US Subsidiary:
A British manufacturer of test equipment for the electronics industry had been selling through distributors in the US and Canada. It now wished to establish its own sales subsidiary in North America. Nigel Warshaw & Associates were asked to advise on location, office and staff availability, and regional tax implications, and to present suitable attorneys and accountants.

There were four, possibly five main market areas for the company’s products, the most important being California and New England. Having worked in both New Hampshire and California, Nigel Warshaw was aware of the tax advantages and disadvantages in both of these regions, as well as the differences in housing, living and operating costs.

New Hampshire was close to about one third of the US market, enjoyed low taxation, and had a pool of workers familiar with the industry. It also offered good schooling and social infrastructure. With only five hours’ time difference with the UK and very frequent flights between Boston and London, it became the choice for the new sales location.

After selecting and presenting local lawyers and accountants familiar with the industry and instructing a realtor to find suitable premises, a proposal was made to the client suggesting the most advantageous corporate structure. The company successfully set up its US operation, creating a significant increase in sales to the North American market.

Market Diversification:
A major US manufacturer of specialized digital imaging chips was seeking new applications for its technology. One possible application was the direct digital photo imaging of printed circuit boards (PCBs). The company was aware of this manufacturing process but unfamiliar with its main players as well as the detailed technological requirements. NWA was asked to assess this business opportunity.

It was found that the technology was viable and that a machine had already been developed using it. However, the maximum number of imaging machines sold worldwide in this industry was less than 1000 annually, of which perhaps 300 might be required at the price expected for the proposed new technology. This small quantity did not fit my client’s business model, where component production was expected to be in the hundreds of thousands.

The project was dropped as a result of my investigation, saving the client a potential loss in this market

Product Diversification:
A global Japanese company currently manufacturing graphics equipment in the UK was seeking to enter the market for printed circuit board (PCB) equipment. They wanted to convert their successful computer-to-plate printing system into a PCB imaging machine. In addition, the company had bought the license rights to a so-called legending process for marking nomenclature onto PCBs. The client needed to decide whether to enter the market at all, and if affirmative, to set up distribution in North America, Taiwan, Hong Kong and China.

The CTOs of thirty PCB manufacturers in Europe, the USA, Taiwan and Hong Kong were polled for feedback on their requirements. From the information gained the client was recommended to proceed with trying to develop this new market only if they did so in conjunction with their legending process. To enter the market only with their imaging machine would not be cost effective.

The company decided to proceed and retained NWA to identify qualified distributors in France, Germany, Italy, Benelux, Scandinavia, USA, China, Hong Kong and Taiwan. Three possible distributors were proposed in each territory, including a manufacturing and marketing company serving the global PCB market that was both motivated and able to cover all the required European and Asian markets.

Product and Market Diversification:
An American manufacturer of quality electronic guitars had developed, concurrent with its audio technology, algorithms to enhance digital color images. As the client had no knowledge of the digital graphics or imaging markets, NWA’s graphics industry associate was retained to introduce the client to global prospects.

Senior level introductions were made to over 30 companies in the US, Germany, France, Italy, Belgium, the Netherlands, Korea, Taiwan and Japan. One or more presentations were made to 14 of these companies.

An initial presentation to a very large Dutch company was poorly prepared and a total flop. It was however, possible to persuade management to give the client a second chance, which was much more successful.

While the technological solution was excellent and of considerable interest to all parties, many prospects had already invested so heavily in similar technologies that they did not perceive sufficient added value to justify investment in yet a new approach.