Checklist: Singleton’s Aquisition Standards

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.

This book is also mentioned in the article What Would Value Investing 101 Look Like? written by Geoff Gannon at GuruFocus.com.

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.

The Great Man Behind Teledyne: Henry Singleton

* * * * * * * * * * * *

The Manual of Ideas on Business Leader Henry Singleton, Founder of Teledyne (audio)

We are pleased to bring you an exclusive 115-minute audio program on the strategy and tactics behind the business achievements of Henry Earl Singleton (1916-99), founder of Teledyne. The program is presented by John Mihaljevic, CFA, managing editor of The Manual of Ideas. John walks the listener through key passages of Dr. George A. Roberts’s biography of Henry Singleton, entitled Distant Force, and opines on the keys to Singleton’s success. Author John Train has credited Berkshire Hathaway chairman Warren Buffett as saying that Singleton has ‘the best operating and capital deployment record in American business.’

Also from Additional resources on Henry Singleton:

• Henry Singleton biography by long-time business associate Dr. George A. Roberts, entitled Distant Force, available on Amazon.com and directly from the author
• Forbes article, entitled “The singular Henry Singleton,” July 9, 1979.
• Wikipedia profile
• New York Observer article, entitled “The Brain Behind Teledyne, A Great American Capitalist,” April 6, 2003.
• Time Magazine article, entitled “Teledyne’s Takeoff,” October 6, 1967.
• Article by Chris Mayer, entitled “Why Singleton’s Buyback Strategy Has Brought in Millions.”
• Warren Buffett mentions Henry Singleton in 1981 letter to Berkshire Hathaway shareholders.
• Bill Nygren mentions Henry Singleton in 2002 letter to Oakmark Fund investors.
• New York Times obituary on Henry Singleton, September 3, 1999.
• New York Times article, entitled “Wall St. Eyes Are On Teledyne,” July 9, 1987.
• New York Times article, entitled “Teledyne Founder Eases Up,” April 28, 1989.
• Harvard Business Review article by Arthur Rock entitled, “Strategy vs. tactics from a venture capitalist,” November-December 1987.

(Source: Manual of Ideas, Seeking Alpha)

* * * * * * * * * * * *

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.