Debt: What you buy things with. 

Cash: Employed to buy debt. 

Profit: What’s left after Generally Accepted Accounting Principles takes the rest. 

Revenue: What you see in 120 days. 

Interest: What they used to give along with the toaster. 

Free Market: see Unregulated Market. 

Unregulated Market: See Ponzi Scheme

Ponzi Scheme: The manipulation of markets by experts who use other people’s money to get rich. 

EBITDA: See OIBIDA

OIBIDA: Yet another acronym. 

Cash Flow: The actual amount of money an enterprise has on hand. Generally disregarded by Wall Street analysts in favor of Earnings Per Share (EPS). 

EPS: Cash that is left after the business does anything worthwhile. The figure is distorted by all sorts of one-time expenses, accounting tropes, write-downs, restructuring charges and other non-cash items. 

Capitalism: The manipulation of markets by experts who use other people’s money to get rich.

Now come on, you guys. It’s your turn. Got any terms you’d care to offer?

First I would like to thank all those who have written in with their comments, suggestions, quasi-serious jokes and trenchant observations. This strategic plan could not have moved to this stage without you.

Now then: Potential means of getting this transaction accomplished are various:

1. Friendly joint venture on synergistic operations. Attractive but limited in value. In such deals, each side keeps its brand, its independence, and its treasured access to key customers and businesses. Very little upside for the acquisitor and too much for the target.

2. Reverse takeover of U.S. corporation by Canada, Inc. Several of you have suggested this. It has its points. But the concept is ultimately unstable. We have a perfect example of such a maneuver: the Time-Warner/AOL merger. In that, a deluded CEO decided, in a so-smart-he’s-stupid move, to allow his gigantic corporate government to be taken over by a smaller and less mature entity. In practice, it was like having a bunch of scruffy Visigoths taking over Rome, which didn’t work very well the first time either.

3. Friendly merger of equals. Better, but still not perfect. A merger of equals is basically a polite term for an acquisition of one party by another in which the target retains much of its original structure. It would involve significant payment up front by the corporation, plus significant incentives to the target’s senior management to remain in place, at least during at attenuated transition period. Integration issues would abound, and much of the existing, unnecessary infrastructure would have to be retained for an unacceptable amount of time. Friendly, merged entities give mergers and acquisitions a bad name, and the reputation for a high rate of failure that they enjoy.

4. Straight transaction. The 1971 suggestion that U.S. Corp simply buy out every Canadian citizen is amusing on its face, and would cost somewhat more now than it would have at that time, but it would guarantee a happy, affluent employee base in the newly unified entity. Such a buyout would create issues, however, with existing employees of the corporation, who, having joined from birth, essentially, would suddenly be thrust into the role of second-class citizens without the huge nest egg enjoyed by the acquired populace up North. Such resentments are difficult to manage. On the upside, a direct purchase of Canada from either its citizens or the United Kingdom, which reportedly has something to do with them, would ensure a free hand for those seeking to administer the transition and the shape of the new enterprise. Simple, clean, quick– and very expensive.

5. Hostile takeover. Leverage their assets. Purchase them with the debt created by the deal itself. Enforce the new arrangement with force, if necessary. The reality is that the target cannot really claim the ability to defend itself. There would be minimal loss of life. The property, operations and employee base would be acquired. The small and rather limp national management structure would be phased out immediately. We could even offer attractive exit packages to those who wish to depart. After the dust settles, most would have stayed, and a plan for zero-based operations could be swiftly developed and executed. Marketing efforts could be implemented to develop new branding, flag, anthems, etc., for the entity. A new currency would be called for, which would be quite simple, exchange rates now being equal. Think of the excitement! The creativity that would be called for! The opportunities for growth and the development of new horizons!

Obviously, further study is necessary. Plans for this strategic initiative have been in development now for more than 200 years. It should not, however, take another 200 to get them field stripped and ready to go.

Yesterday we laid the groundwork for a major, strategic acquisition of a very attractive, synergistic and complementary property that is geographically contiguous, has plenty of upside and, for the most part, speaks the same language.

In that regard it is worth noting that up-front costs could be largely offset by an almost immediate divestiture of what is basically an independent, free-standing entity within the acquired corporation: Quebec. While not trading at a very high multiple, its sale or spin-off could generate significant equity and rid the new corporate entity of lingering legacy and cultural issues. There are many potential suitors for what is clearly a very attractive property, the most obvious being France, which is still smarting from its loss in the French and Indian Wars and has a high-profile CEO in search of global profile. Other tactical post-merger actions to rationalize high upfront costs abound, but will be discussed at a later date.

I would like also to offer at this juncture, before proceeding further, my thanks to those of you who weighed in so far with your thoughts and alternative suggestions. Some were patently facetious, while others drifted into issues pertaining to execution that must await subsequent installments of this strategic plan.

As always in the pursuit of any focused acquisition discussion, alternate scenarios do suggest themselves. Most notable has been the notion of setting our sights not on our neighbor to the north, but our amigo to the south. In that regard, I hasten to state that, in my opinion, the acquisition of Canada does not preclude the development of plans pertaining to equally intriguing possibilities involving Mexico, the former proprietor of vast segments of our current asset base, including Texas, California and most of the Southwest. In my view, however, one must put the cart before the caballo. Large global corporations get themselves into trouble when they overextend their holdings, as any study of Rome, Britain and Time-Warner (TWX) will tell you. This is not to say that a hemisphere-wide master strategy might not lie somewhere down the road. Right now, however, let us keep our eye on that which can be achieved in the near and intermediate term.

We have already looked at some of the global issues facing the current incarnation the corporation, which is now more than 230 years old and still functioning rather well for a mature organization. Day-to-day leadership of the entity has floundered recently, but as we all know it is difficult to sustain the quality of management over time, and on the bright side we can state with some assurance that the underlying power structure is still rather robust, and the class that operates it firmly entrenched in power regardless of who is sitting in the corner office.

Still, recalcitrant issues exist that would almost instantaneously be addressed by the proposed transaction. On a somewhat more granular level, then, let’s look at just a few:

• Need to expand customer base/sales territories: The U.S. frontier is a thing of the past. Even the depths of Wyoming, Idaho and Montana are crawling with identical strip malls and high-end boutiques. Look at a map. There’s a lot of Canada up there, most of it in desperate need of consolidation and branding. It is, quite literally, as big as all outdoors; similarly, there are many, many small to midsized urban centers in need of large glass boxes and roads leading to them. The existing corporation has the capital and the know-how to get the job done. All we need is the land and the customer base to justify the expansion, which in our view would be almost instantaneously accretive;
• Limited natural resources: Once again, the acquisition offers an immediately solution to this problem. Oil is, quite literally, seeping out of the ground up there, and there is a wealth of other minerals, lumber and, of course, wind;
• Stagnation of culture: Perhaps most disturbing about current trends within the existing corporation is a “been-there, done-that” mentality and a certain calcification of the spirit of adventure, unlimited opportunity and entrepeneurial drive that made us great not only in our own estimation but in the mind of the world as well. This corporation is viewed now — internally and externally — as increasingly insular, hostile to new recruits to the enterprise, and set in its ways. Canada is, in this sense, far more congenial to some of the core cultural issues that once defined us. They have cowboys, for instance; real ones that actually have something to do more with cows that with guitars and funny hats. There are innumerable other existing synergies that speak to the ease with which integration of the acquired party could be effected, including consistencies in language, cuisine and even pop music, where Canadian artists routinely pass themselves off as American without fear of reprisal.

There are other operating gaps in the corporate fabric that this acquistion would address. Lest the benefits be perceived as purely opportunistic or lopsided, however, it must be recognized that the acquiree would benefit from the deal as well. For its part, the acquisition target needs capital, infrastructure and some sense of what to do with the enormous acreage at its disposal with which, frankly, it’s done very little for the several hundred years of its existence. This lag could quite naturally be laid at the feet of its original stewards — the French and British — but the entity has been essentially on its own as a free-standing corporation for quite some time and there’s really no excuse for all that wasted space.

With so many compelling arguments in favor of the potential acquisition, we must at the same time allow that there are also powerful contradictory trends and considerations that must be addressed as well. Before we arrive at a discussion of conceptual execution strategies, then, it is incumbant upon us to do so. 

Next: Roadblocks and other barriers to entry.

Word comes in today’s USA Today that Thanksgiving, once a non-religious holiday in the United States, has finally morphed into one in which we collectively worship at the central shrine in our culture: Wal-Mart (WMT).

That’s right, new studies of our consumer behavior show that as soon as the first round of turkey is tucked away, an increasing number of us are going online to shop at our favorite stores, and some of us are even leaving the couch for a while to get the Xmas season started early.

In recognition of this fact, stores are now moving their Black Friday promotions to Thanksgiving Thursday, so that people can get busy dumping their wallets into the collective maw of our mercantile establishment.

And so the time we must spend with our families, fruitlessly not working or shopping, once again shrinks to a size even more miniscule than it was before. Already many of our holidays have become excuses to buy new cars or bulk up on consumer goods offered for that day only at fabulous prices. Now Thanksgiving is wide open too!

Ka-Ching! Now… On To Christmas!