Bond & Pecaro has been called upon to consult with clients to appraise and evaluate cross-border investments and acquisitions. These may include investments outside of the United States or, alternatively, investments by foreign entities in the United States.
While a domestic investment requires a sophisticated analysis of economic, technological, economic, competitive, and consumer preference factors, the evaluation of an international opportunity demands an even higher level of scrutiny. Variables such as exchange rate fluctuations, economic restrictions, and political stability, which are less relevant to a domestic media or technology company, may become paramount.
Moreover, many of the “givens” in the United States will be substantially different overseas. Sources of information such as audience measurements, market revenue data, labor costs, and pricing may be non-existent or incomplete. Despite efforts to standardize financial reporting through the implementation of International Financial Reporting Standards (“IFRS”), differences in national conventions regarding items such as commissions and discounts can complicate the meaningful measurement and comparison of financial results. Legal and regulatory parameters related to taxation, earnings repatriation, and ownership restrictions need to be understood. Cultural differences can impact marketing and consumer purchasing behavior so significantly that they can be a key driver of the investment decision.
Because each international project is unique, Bond & Pecaro’s qualifications in this area can best be illustrated by describing several actual engagements. In one case, Bond & Pecaro was retained by a media and industrial conglomerate to assist with a strategy for bidding in a Latin American government auction for television station licenses. After a careful analysis of the national economy, the competitive landscape, media pricing and consumption patterns, and the resulting revenue potential for the subject stations, Bond & Pecaro concluded that the bid level was not economical and recommended that its client withdraw from the auction. The decision was validated several years later when the company that paid a higher bid failed. Bond & Pecaro was later retained by a major financial institution to assist with the workout of the distressed bidder.
On another occasion, Bond & Pecaro was retained by the US Trade and Development Agency (“USTDA”) to determine the feasibility of the construction of a cable television system in Eastern Europe. Based upon this analysis the USTDA was able to refine the scope of the construction project and proceed with implementation.
Bond & Pecaro was also retained to allocate the purchase price of a professional testing and training service business in Europe. This required the consistent valuation of tangible and intangible assets in both Europe and Asia, and also that the values be expressed in the local currency. The Bond & Pecaro analysis carefully reflected local market conditions and expeditiously passed a rigorous audit process, allowing the client to accurately report the transaction for tax and financial reporting purposes.
In short, international consulting at Bond & Pecaro means more than simply applying boilerplate financial techniques. We scrutinize local market characteristics to inform the client about the risks and opportunities associated with a venture as well as the additional uncertainty imposed by unfamiliar sources of information. The company’s expertise in the media and technology sectors, combined with its sensitivity to international market variables, make Bond & Pecaro a first choice for companies seeking consultation for their global investments.