founding partner of Bybel Rutledge LLP
Q: Do you feel this is a good time for a company to merge with or acquire another business?
A: To quote Dickens in "A Tale of Two Cities," it's the best of times and it's the worst of times. We're having an uncertainty right now in the environment — the political environment, the business environment, the financial environment. I feel that uncertainty can create opportunity.
The flip side of opportunity and uncertainty is going to be risk. Right now, the issue for companies is to manage risk and maximize opportunity.
What are some of the biggest things a businessperson needs to keep in mind when pursuing an acquisition?
No. 1 is probably stay true to yourself, your company and the reasons (why) you consider or enter into a transaction. Don't get caught up in the deal itself, and don't get caught up in the drama surrounding the deal. Stay focused on fundamentals. Know your culture. Have your deal parameters established — the reasons you enter into the transaction and the cultural, structural and financial considerations.
Get advisers who know what they're doing. Have experience, reputation and performance (on your side). To put that in perspective, (consider that) companies evolve from their initial founding stage through a life cycle. Their needs evolve, and as those needs evolve, so, too, must the skill set of their advisers. We work very closely with local advisers like the attorneys, accountants and consultants.
What role does a company's board of directors play in the process?
From a public company's perspective, their role is paramount. The board's obligation is to fulfill their fiduciary duties, represent their corporate constituencies and make a decision that is in the best interest of the company and those constituencies. Basically, they provide a corporate governance role, which is checks and balances between the constituents, the board and the company.
When it comes to private companies, obviously from a legal standpoint they fulfill the same role. From a practical standpoint ... a board of directors can provide a valuable role for entrepreneurs in that they provide a reality check. It's not the usual role they would provide in the sense of a public board. But, for private entrepreneurs, oftentimes you don't talk about boards, you don't think about the boards as much, but that's where I think a board can add real value to a private company.
How have transactions of this nature changed since you began your career?
I started back in 1984, and I taught mergers and acquisitions at Dickinson School of Law for 19 years. Looking at almost 30 years of practice and almost 20 years of teaching young professionals, I see there are accounting rule changes ... and tax laws have obviously evolved over that period of time.
The business environment has always been cyclical, but those cycles have become much more pronounced and much more volatile. The regulatory environment has become an even bigger and larger labyrinth than it used to be.
What that has resulted in is the margin for error in mergers and acquisitions has substantially narrowed and reduced. All those factors combined means that the risk/reward balance has become much more precarious. When you don't have that margin for error, it means those issues have and will continue to impact rates of returns for people engaging in merger-and-acquisition transactions.
What services does your firm provide companies eyeing a merger or acquisition?
We basically assist and advise companies through the entire merger and acquisition process. From the outset, initial planning phases, we help with "does the transaction fit your strategic plan?" and "does it fit your firm's culture?" (through) our consulting unit, BR Solutions. Then with financial analytics and evaluating from a financial standpoint a transaction, that would be our Commonwealth Advisors unit.
From a law firm perspective, it is structuring the transaction, analyzing the legal aspects of the transaction and what documentation is associated with that, negotiating a transaction, closing it, and even assisting with the integration.
I like to say, basically, we help companies and advise them from the conception of their idea to the execution of their idea.
About Nicholas Bybel Jr.
Bybel and his wife, Dr. Ann Marie Bybel, live in Manheim Township. They enjoy traveling, exercising and spending time with their three grown children.
Bybel is originally from the Reading area. He studied at Georgetown University, Dickinson School of Law and Albright College.