Auctus Development provides auction strategy and game theory consulting services to enterprises across the United States and around the world.
Of particular concern to many of our clients is the growing tendency of large companies to use reverse auctions for major purchases. This upsets the many years of relationship-building that our clients’ sales forces have invested in learning about their customers. Sales personnel are thrust into new and completely unfamiliar arenas. The time and dollars invested in sales force recruitment and training (especially training) are in jeopardy of being lost. And most importantly, major accounts and their associated revenue, profit, market share, overhead support and prestige are all at-risk.
We understand these concerns.
We can help our clients win the auctions that they want to win. And even if they don’t want to win, we can help our clients make it very expensive for their competitors.
When owners of a company, joint venture or property decide to sell out to each other, they frequently use a process wherein one owner picks a price and the other owner decides whether to buy or to sell at that price. In its simplest form, the process is an adult version of two children splitting a glass of lemonade – one pours, and the other chooses. In the business world, this type of buy-sell arrangement may be called a variety of names including shotgun, Chinese auction, or push-pull.
At first blush it would seem that picking an offer price would be a relatively straightforward process. In fact, it is not. Because the company, property or asset is worth differing amounts to each owner, choosing the right offer can be daunting. Each party has different business drivers, and outcome ramifications vary significantly by party. With the proper guidance, however, it is possible for the offerer to sell at a significantly higher price than book valuation, or buy at a significantly lower price than book valuation. For example, the joint owner of a privately held Pennsylvania manufacturing firm recently bought out his partner for $1.3 million less than the client’s initial valuation of the company ($3.5 million – a 37% discount).
Using input from the client’s valuation/appraisal, legal and accounting/tax teams, and adding the client’s risk-reward and resource profiles, Auctus Development uses proprietary analytical tools to identify the best range of offering prices providing optimal returns at acceptable risk levels. Auctus’ value added services may also be offered under the spectrum of services delivered by trusted advisors to the client.
EXPERT AUCTION CONSULTING SERVICES
We help our clients in all different kinds of auctions:
Competitive hostile takeovers
Futures and derivatives
Governmental sales (particularly municipal)
Pipeline and electrical transmission capacity
Oil leases and foreign concessions
Pollution emissions credits
MANIPULATING BIDDER BEHAVIOR
Well-designed auctions are constructed to manipulate bidder behavior to achieve the designer’s desired outcome. Auctus has a proprietary list of “Bidder Behavior Drivers” that we use to aid our clients in manipulating bidders or avoiding being manipulated.
For expert auction and reverse auction consulting to help you win more auctions with better margins, please contact:
Auctus Development / 2476 Bolsover, #482 / Houston, Texas 77005