A Foreign Affair with Minnesota Companies

“The U.S. mergers and acquisitions market has slowed down dramatically in the last twelve months, and that means there’s less competition for foreign buyers who have cash and want to make a strategic purchase,” Stanchfield says.

Minnesota, with its strong medical, technical, and financial service industries, is a natural target for buyers. “Investors are looking to pick up technology on the cheap, and the Twin Cities has wonderfully well-developed medical technology,” says Girard Miller, a partner and co-chair of the global alternative energy practice at Fulbright & Jaworski, LLP, an international law firm with offices in Minneapolis.

Minnesota can also offer good picks in biofuels and other renewable energy. “The U.S. is a huge untapped market for renewables,” Miller says. “Foreign companies want a place to use tax credits, which the U.S. has, or a place to have distribution and get a foot on the ground.”

U.S. laws can also help attract foreign companies. They like the American system of protecting intellectual property—laws that most developing countries lack—and appreciate “well-developed corporate law that’s supposed to yield predictable results,” says Joe Humke, a partner at the Minneapolis-based law firm of Lindquist & Vennum.

Most of all, foreign businesses want a chance to extend their operations into new markets. “I think we’ll continue to see foreign companies looking at businesses that are either extensions of what they do, or competitors . . . and fitting them into their strategies,” says Matthew Knopf, a partner in the corporate group and chair of the M&A group at Minneapolis-based law firm Dorsey & Whitney.

Great Expectations

Historically, commerce has caused cultures to mix, and the current mergers and acquisitions market is no different. “If there’s a deal, and you have money, cultural differences aside it will get done,” notes Bob Fafinski, partner and CEO at Fafinski Mark and Johnson, P.A., a law firm in Eden Prairie. It may not get done, however, without an effort to overcome differences in cultural expectations.

It’s been said that Americans and the British are one people separated by a common language. These days, the same might be said of the global business community. “Even though people in foreign countries speak and communicate in English, that doesn’t always mean they understand the fine points of a transaction,” Sorensen says. “You have to take particular care in communications. You can’t explain yourself and the nuances of your business or your technology in dry, contract language.”