Introduction

摘要

Growing (net) revenue is the key to successful operating businesses and is the antidote to recession. Two basic approaches to revenue growth exist: organic (internal) and external (mergers and acquisitions).rnWhile acquisitions provide a one-time increase in revenue, they often are overpriced (after all, the current operator of the business generally knows more about it than the purchaser and their willingness to sell suggests they think the acquisition price exceeds its value). Further, assuming the goal is to increase shareholder value (stock price), if the market has correctly valued the company (which was questionable in the dot.com and real estate mortgage induced bubbles), then the market has correctly anticipated further growth. Thus, the only way for the acquisition to increase firm value is if it can grow net revenue faster than the previous owner, i.e. increase organic growth.