Acquisitions can have an enormous impact on growth. The outcomes of an acquisition will differ dependent on how well the deal is executed. The most successful buyers use a consistent set of steps to guide them through the M&A process.
The initial step of M&A is to determine the motive behind the acquisition. This will give you a framework for all future decisions and actions. Buyers with clear motivations can avoid common pitfalls associated with acquisitions like having multiple targets in mind, trying to close on a deal without having completed due diligence, and spending too much for a business that’s culture and strategy are not a good fit.
After you have identified your purpose, the next thing to do is to create specific guidelines for identifying potential companies to target. This will include factors such as industry focus geographic location, financial health, and intellectual property factors. The best M&A teams make use of a variety of sources to identify potential candidates, ranging from databases to online portals, and then refine their list to “A” and “C” deals.
After a long and often difficult due diligence process the final step is to create a narrative for the company. This is the story look these up you will tell to clients suppliers, customers, and competitors. It’s crucial that it’s positive. It’s important to also consider the impact that an acquisition will make on your P&L and balance sheet.
