Pivotal Group Acquisition
Pivotal Group is an investment company based in Phoenix. The company deals in private equity and real estate investment portfolios. Some of the company’s major real estate investments are its hotels, which are in the category of luxury investments; office properties; and community development properties. For example, the company developed the state-of-the-art Century Plaza Hotel in Los Angeles. Another property credited to Pivotal is the Ritz Carlton in Phoenix among many properties that have been developed by the company (Mergers & Acquisition, 2010).
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To strengthen its portfolio management, the company has resorted to acquiring some of the developed properties. The recent appointment of Scott Knauer as the managing director for real estate shows how the company has valued the acquisition strategy that they intend to use to strengthen its resource base and market value.
To develop its market strength and increase its competitive advantage, the company has decided to target less performing types of properties such as hotels and resorts, office premises, and community development projects. The company intends to develop these strategically placed properties to increase their value after acquiring them at affordable costs (Mergers & Acquisition, 2010). The company intends to use its ability to access capital, good record in the management and development of a property, and its resourceful human resource to acquire and redevelop the properties to increase its market value, hence strengthening the value of the company in the competitive market of real estate and property development.
The acquisition strategy is being pursued by Sterling Chemicals Inc., to increase its diversification strategies that will ensure the company grows according to its long-term plans. The basis for the successful development of this strategy is defined in the company’s ability to increase its market share through cash flow streams. The ultimate goal of the company is to increase its market share and reach a level where its shares can be listed in the New York Stock Exchange or The NASDAQ Stock Market (Anonymous, 2010). To make its acquisition strategy more workable and strategic, the company has decided to reach out to companies that have experience in the chemical and oil industry. Such companies are those dealing in the manufacturing and distribution of chemicals, and trading in petroleum and chemical products.
To effectively achieve its goal, Sterling Chemicals has decided to develop different approaches to acquisition, depending on the financial demands of such initiatives. For example, the acquisition may involve the full purchase of the target company with the property- cash deal, merger, stock exchange, or any other financial deal that would involve financial cost to the company. The other feature of its acquisition would involve joint ventures or partners with other identified firms. This is likely to increase its market share and build strategic management in the wider market presence. According to John Genova, the Sterling CEO and President, “Sterling has numerous qualities” that will make it appealing to other firms intending to be purchased or acquired so as to increase their liquidity (Anonymous, 2010).
The acquisition is one way in which companies can increase or expand their market share in the global market. To cater to a wide range of global customers and enhance the strength of the market niche over time, the two companies, Pivotal and Sterling have resorted to using acquisition as the first strategy to increase market presence as well as widen brand name.
- Anonymous. Pivotal Group Appoints Scott Knauer Managing Director of Real Estate. Atlanta, 2010, pp.17.
- Mergers & Acquisition. Sterling Chemicals Announces Strategic Acquisition Strategy. Atlanta, 2010, p. 7.