All businesses want to be successful. Mergers and acquisitions are very common business strategies used to improve the success of a business. Sometimes a larger business will merge with or acquire a smaller business in an attempt to improve the strength of the larger business and achieve success.
Moody-Price LLC, an equipment and supplies distributor based in Baton Rouge, Louisiana, recently purchased Guico Specialty Company. Guico, a company based in Lafayette, Louisiana, sells high-pressure industrial equipment. Unlike Moody-Price, which has a number of locations throughout Louisiana, Guico is a one-man shop. Moody-Price has acquired Guico in the hopes that the deal will increase the sale of Guico's products. The terms of the Moody-Guico agreement have not been disclosed.
Acquisitions are very common business transactions. However, before companies enter into an acquisition agreement, the acquiring company will first want to carry out a due diligence investigation of the target company. It is important that the acquiring company is fully aware of not only the target company's finances, but also any and all contracts, licenses and assets of the target company. It is also important that the acquiring company be aware of any pending litigation between the target company and another business.
A corporate strategy can often include one business acquiring another business in an attempt to strengthen the company. However, to make sure that such actions are more likely to strengthen rather than weaken the business, it is important that the acquiring company conduct a thorough investigation into the target company's finances and operations.
Source: The Advocate, "Moody-Price acquires Guico Specialty," Ted Griggs, Jan. 14, 2013