Through strategic alliances (“SA”), a business can turn under- utilized resources into a new profit center, or enter untapped markets more quickly and at less cost than going it alone. For these reasons, SAs- usually in the form of a joint venture- is becoming a popular method for expanding a business. Major publicly held corporations and mid-sized privately held companies are utilizing joint ventures for these reasons, and smaller or even “micro-cap” companies can also benefit from such an initiative in the right circumstances.
A poorly thought out SA- the hastily conceived or inadequately documented joint venture-can result in compromised intellectual property resources, a tarnished market reputation, or a draining financial burden, in the form of excessive costs for dispute-resolution. The firm suggests that SAs be approached as would any other corporate undertaking, with a skilled and experienced advisor setting up carefully structured approaches to expense-sharing, tax consequences, limits on the use of intellectual property, and day-to-day governance, control and financing norms. The caliber of advisor required to achieve these objectives is not different from that required for the achievement of a company’s broader growth strategies. The firm has the requisite expertise and skill set, derived from negotiating strategic mergers and acquisitions both domestically and internationally and direct experience in putting together joint ventures for clients.
Akin Bay’s SA Services Include:
- Screening and short listing a set of prospective partners
- Development of a detailed business plan for the joint venture
- Due diligence checking of the credentials of the other party
- Advisory services concerning the appropriate structuring of the joint venture
- Financing, financial controls and governance terms
- Development of an exit strategy and terms of dissolution for the joint venture
Companies considering a SA/ joint venture initiative will find Akin Bay well-versed in handling all these issues in the complex world of SAs.