Is this a reverse takeover on my company?

Discussion in 'Growing and Managing a Business' started by JohnO, Sep 28, 2010.

  1. JohnO

    JohnO
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    Hi,
    I require some business advise,
    I am a part owner in a company. We recently were approached by one of our competitors based in another state who are about to provide the same services in our state.

    Over the last few weeks they have made us an offer that seems a little sus and too good to me.

    The offer is that our company would remain ours however we would co-brand our name to theirs. All of our back office, accounts, pays etc would be done by them and we would have their access to their training & development section of the company.
    All of their current customer in our state would be “sub-contracted to us” and they would take a cut from our current customer base.

    Is it just me or does this offer seems to be a little odd?

    It sounds to me more like they are obtaining our company free of charge and offering us management positions making it sound like we still run the show to make it seem like a great deal, has anyone else seen something like this happen or used it to obtain a competitors company?

    Your feed back is much appreciated
    Regards,
    John
     
  2. Mountain Man

    Mountain Man
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    maybe I don't understand the offer. It sounds like they want to take over your company and hire you as employees.
    Before making any decisions I would want to know:
    How successful they are, are they going to be REAL competition?
    Do they offer the same services?
    Do they have the resources to make your life difficult?
    Or are they just looking for an easy way to gain customers?
    What does co-branding your names mean?

    I have only ever been offered one partnership with "true"competition and I didn't like it but I have worked with companies that offer complimentary services many times. From what I have seen, the only reason competition wants to work with you is to take your customers.
    I would be very cautious with any working agreement.
     
  3. VVhite_Angel

    VVhite_Angel
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    Hi,

    Maybe they are affraid to see the potential success of your services ? Thats why they are offering this.
    The questions of Moutain Man are good ones.

    But you should know if they can be dangerous, what will you become if you accept or if you decline.
    Sometimes it's better to keep competition between companies, Increase quality, and possibilities.

    I prefer develop services with this company, and not beeing "eaten". I mean, i recently develop a program with a web agency, making an interesting service with both qualities but ... we keep the seperation between us.
     
  4. Fergal

    Fergal
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    Welcome to Business Advice Forum JohnO.

    Is the competitor in question a larger sized company than yours? Is this something they have done before? If it is you could ask them for details on specifics of the arrangements they make and you could even try to some of the companies that they are partnering with, to get their views on how it worked out.

    There's probably not much too lose by meeting with the company and asking them for further details of what they are offering. A meeting would clarify a lot of issues and give you a feeling as to whether or not they are people you would like to work with.
     
  5. JohnO

    JohnO
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    The deal after much thought sounds like they are offering us the headaches of a company. staffing etc and leaving taking care of the easier part of payroll and aggressive sales. this leaves me in doubt of what control we have in which customers we take on board. and too me makes it sound like you are more an employee then an employer.
     
  6. Fergal

    Fergal
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    Thanks for posting back JohnO. Are you still considering this option? Have the company provided you with any paperwork or a proposal that outlines exactly what they are offering?
     

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