Henry Singleton’s Standards for Acquisitions
In the earlier post The Great Man Behind Teledyne: Henry Singleton and the recording The Manual of Ideas on Business Leader Henry Singleton, Founder of Teledyne, there is a part starting at 1:12:31 that describes the standards that Singleton had for deciding whether or not a company was a good acquisition candidate for his Teledyne.
The questions that Teledyne asked when analyzing and considering potential acquisitions were:
- Is the company profitable?
- Do they have a good balance sheet?
- Is their profit and loss statement accurate?
- Do they have a clean inventory?
- Is their backlog realistic and well documented?
- Is their management on top of their operations?
- Would management be willing to stay if acquired?
- Have they made long ranged plans to maximize their profit in a sell out?
- Does the business have growth potential?
- Is there opportunity for growth in profit?
- Can cash be taken from the company for use elsewhere?
- How is depreciation counted and is it a significant percentage of profits?
- What is the condition of their physical plant?
- Would this company be a good fit within Teledyne organization and its goal?
See here for a review of the book Distant Force A Memoir of the Teledyne Corporation and the Man Who Created It.
Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company or individual mentioned in this article. This article is informational and is in my own personal opinion.