Scrolling through many suitors, wondering if the one that takes your fancy will respond and weighing up the pros and cons to see if you’re a perfect match – no, we’re not talking Tinder, but rather finding the right acquisition for your business!
Ensuring the completion of an acquisition can be a long, and stressful process, with the worry of it possibly not aligning with your growth plans, but there are steps you can take to ease these anxieties.
To guide us through the practice of searching for the perfect acquisition, Rebecca Thorley, Client Services Director, is here with key pointers that help you find the ideal partner with confidence.
Over to Rebecca
Acquiring a company through your business can be an extremely exciting time. If you already have a potential target or goal in mind that you want your company to achieve, the next steps are crucial to help increase the success of your business.
Of course, like dating, you need to do your research. This unfortunately means more than just a quick look at their Instagram profile. After all, you’re buying a major asset, so it’s vital you do your homework, so you understand that the business you’re acquiring won’t leave you out of pocket.
There are fundamental factors that you’ll need to consider to ensure you have a successful acquisition…
Outline your acquisition objectives
Most importantly, its crucial that you identify what you’re wanting to achieve through the acquisition. You’ll need to carefully map out those strategic goals and understand the industry that you’re looking to target. You’ll need to also understand and outline expectations of synergies, and of course, be clued up on financial parameters to really help narrow down the search. This will allow you to focus on spotting and securing the right opportunity.
Build a strong network
If you went on a date with someone you liked and things were going well, you’d want your network of friends (and maybe family) to know about it, and help spot any red flags, right? Well, the same applies for the process of an acquisition. Do you see a pattern forming here…?
Tapping into your network of industry professionals, consultants, and advisors can help start to build new relationships within your chosen sector, which can lead to many valuable acquisition prospects.
Ensure thorough due diligence
When we say due diligence, we mean an investigation, but it’s a bit more complex than that. This is where a potential buyer really examines and explores a company that they’re considering buying. This will be carried out with the buyer’s team, in conjunction with the potential company’s lawyers.
It’s essential you take a deep dive into the financial and operational aspects of any potential acquisitions. This is to make sure any risks, consequences and concerns have been addressed in detail before any final decisions are made.
Background checks, background checks and background checks
Catfish are known to be a thing in the dating world. Similarly, you’ll need to make sure you have carried out comprehensive and detailed background checks on the company you’re looking to acquire, to make sure there is no false or inaccurate information that could damage the acquisition at a later stage of the process.
This will need to include:
- Establishing the company’s credit history.
- Identity checks on individual’s who will play a key part in the acquisition.
- Discovering if there are any threats that could jeopardise the purchase, like court actions.
Company values align
They may say when it comes to finding a life partner, that opposites attract, but when acquiring, this certainly doesn’t apply. If the reason you’re looking for an acquisition is to help develop your own business and increase its value, you’ll be more successful, and perhaps more profitable, if your culture and values align. Grasping an idea of how compatible your culture is will help to define if there are any major gaps or issues that need to be addressed before the acquisition goes ahead.
We’re here to guide you
If you’re in considering the acquisition of another business to propel your growth plans, we’re here to help. To speak to one of our Corporate Finance Team and arrange an initial meeting at a time that suits you, please email [email protected]
