Our growth strategy includes acquisitions. Acquisitions involve various inherent risks, such as:
- our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of acquisition candidates;
- difficulties in integrating acquired businesses, including the potential loss of key personnel from an acquired business, our potential inability to achieve identified financial, operating and other synergies anticipated to result from an acquisition, and integration issues associated with internal controls of acquired businesses;
- the diversion of management’s attention from our existing businesses;
- the potential impairment of assets;
- potential unknown liabilities associated with a business that we acquire or in which we invest, including environmental liabilities;
- new and proposed regulations limiting the enforcement of noncompetition and nonsolicitation agreements;
- production delays associated with consolidating acquired facilities and manufacturing operations;
- pre-existing vulnerabilities, undetected malware and access management issues at the acquired business and its supply chain;
- the incurrence of significant transaction costs, including for acquisitions which we may not complete; and
- the inadequacy of indemnification, insurance, escrows, holdbacks or other forms of protection for liabilities of the acquired company.
If we are unable to make acquisitions our future growth may be adversely impacted. Our ability to make acquisitions depends on a number of factors, including the availability of potential acquisition candidates at reasonable prices, competition from other bidders, the ability to obtain regulatory approvals, including under merger control and foreign direct investment laws, and the availability of debt and equity financing, among other factors. For additional discussion of business acquisition, see the discussion under “Item 7. Management’s Discussion and Analysis of Operations and Financial Condition” and Note 3.