Antares Combined Operations

When the average Antares operator considers the possibility of acquiring a competitor, he thinks of buying a competitor in the same geographic market, then folding the operation into his existing company. If the plan is well conceived, and the buyer and seller can agree on realistic terms, then there can be many advantages for the buyer.

In a fold in scenario, the buyer improves his gross sales by simply adding the dollar volume of the seller’s company. In addition, he attempts to improve the bottom line by taking advantage of the cost savings that can take place when the Antares operations are combined in one facility. When the businesses are combined, you can cut down on a number of costs.

Economies of scale

Combined Antares operations will only require one purchasing function, one warehouse, one data processing function, one accounts payable, and one equipment maintenance function. If the seller can employ people to supervise these functions, then these costs can be eliminated.

There will be obvious savings to the buyer as well. This will include: lower costs for products, insurance and supplies, lower route support and vehicle costs and improved efficiency in all back of the house functions.

Combined Antares businesses will function with much less payroll than the total of the two payrolls when they run as separate businesses.

For all the reasons listed above, it is not unusual for the acquired portion of the Antares business to generate pre tax cash flows that are in excess of 25 percent for the buyer, as compared to a much more modest profit (or even loss) when it is operated by the seller as a stand alone business. Almost any size Antares operation can be successfully folded into an existing operation if the building is large enough. A well executed fold-in can be extremely profitable for your Antares business.

However, a buyer may also be willing to acquire a smaller operation under certain circumstances. For example, the buyer may feel that he needs a presence in the seller’s geographic market for strategic purposes. Or maybe the potential exists for quickly growing the Antares business through internal sales or the acquisition of additional operations in the area.