Business Acquisition

A nationwide chain of 165 stationery and gift shops is called Paper Source. The business offers a variety of products, including papers, customized stationery, presents, greeting cards, gift wraps, papercraft kits, and stamps. Its main office is in Chicago, Illinois, established in 1983. The business is about to be acquired by Elliot Investment Management (EIM), owned by the same person who owns Barnes & Noble. The financial support required to exit Chapter 11 bankruptcy will be provided by EIM (El-Bawab, 1).

Even if Barnes & Noble and Paper Source will function independently, buying Paper Source will provide Barnes & Noble with a competitive edge. This is due to Paper Source’s ability to provide the goods and services that Barnes & Noble provides.

Customers of Paper Source can aid in extending Barnes & Noble’s target market. Additionally, because these two businesses sell comparable goods, they may employ the same marketing and sales tactics, reducing expenses and boosting productivity. According to recently released CDC guidelines, fully immunized individuals no longer need to wear masks indoors or outside. This is wonderful news for Paper Source since the event organizing company can return to work. Due to its established relationships with card manufacturers and suppliers, Paper Source will be able to meet the rising demand for party supplies, invitation/greeting cards, gift wraps, gifts, etc. Paper Source also purchased Papyrus in March 2020, which offered premium stationery, greeting cards, and invitations. Additionally, this will broaden the variety of its products (Paper Source, 2).

Different factors can influence a company’s decision to utilize an acquisition strategy. The acquisition might alter the company’s competitive landscape, boost its market dominance, or broaden its diversity. However, the company must choose an efficient and sensible acquisition strategy to generate above-average returns. The inability to undertake due diligence is the issue that has the biggest impact on an acquisition’s success in the modern economy. Large investment banks often carry out this step while the acquiring firm assesses the target company. This procedure will scrutinize financial and other facts, including tax repercussions, cultural divergences between the target and acquiring firms, geographic structure, production capacity, marketing tactics, etc.

Additionally, the due diligence procedure aims to find any potential dangers and flaws in the investment opportunity to prevent a disastrous business deal. We should consider how the company will fit into the acquiring corporation’s long-term strategic objectives and business plan.

Reference

Nadine El-Bawab. May 11, 2021. Barnes & Noble owner buys stationery retailer Paper Source out of https://www.cnbc.com/2021/05/11/barnes- noble-owner-buys-stationery-retailer-paper-source-out-of-bankruptcy.html.

Paper Source. March 2, 2020. Paper Source Acquires 30 Papyrus Stores, Expanding Their Presence Amidst U.S. Retail Closures. https://inside.papersource.com/2020/03/02/paper-source-acquires-30- papyrus-stores-expanding-their-presence-amidst-u-s-retail-closures/.

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Question

Using the Internet:
Research acquisitions currently underway and choose one of these acquisitions to discuss.

Business Acquisition

Based on the firms’ characteristics and experiences and the reasons cited to support the acquisition, do you think it will increase strategic competitiveness for the acquiring firm? Why or why not?
Of the problems that affect the success of an acquisition:
Which one do you believe is the most critical in the global economy? Why?
What should firms do to ensure they do not experience such a problem when using an acquisition strategy?

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