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Hutchinson Technology agrees to acquisition by TDK

 

During the life of any business, there are decision points where the owners and managers have to make a significant decision. A business may have reached a point in its growth where it has to decide to increase the size of the business, or determine that it is where it needs to be and any further growth would create an unacceptable exposure to some risk.

New debt, changes in market or competition or such external forces as the Great Recession can all affect how a business makes that big decision. For the Minnesota company, Hutchinson Technology, a collection of factors weighed in the decision process to be acquired by TDK the Japanese electronics manufacturer, for $126 million.

 

While Hutchinson is a significant player in their marketplace, the company was facing a consolidating industry and some large debt payments in the future, so merging with a much larger global corporation provides the benefits of a larger market for their product and much deeper pockets to cope with future financial volatility.

They build component parts used in computer hard drives. That market has been changing with hard drives built from flash memory beginning to gain on the mechanical hard drives business, which has been Hutchinson Technologies primary business.

Any merger or acquisition is complex, especially when that deal involves a foreign corporation, and it is essential that comprehensive due diligence is performed. From valuing assets to ensuring that significant employees remain in place during the acquisition and transition, there are many moving parts.

Your attorney or law firm can assist with much of the work, from investigating the potential target or acquirer to negotiating and drafting the agreement. Transformative deals like this require the highest degree of attention to detail, but when executed properly, they can ensure the survival of your business or bring it to the next level of success.

Source: startribuine.com, "TDK to buy Hutchinson Technology for $126 million," Evan Ramstad and Patrick Kennedy, November 2, 2015

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