Acquiring businesses is a long-term endeavor that can take months (and even years) to fully realize. M&A is a vital component of growth for businesses of all sizes. Although every acquisition is a slightly different, there are general guidelines that companies must follow to ensure that the deal has a chance of success.
1. Determine your strategy.
A sound M&A strategy will include a clear explanation of the goals you intend to achieve, such as growth in revenue and client expansion and exposure to new clients. Also, it includes a detailed financial evaluation, which includes your current financial status and projections for the market.
2. Conduct searches.
Due diligence is an important step in M&A which involves double-checking financial documents as well as conducting search on the company’s records to uncover tax liens, bankruptcy filings, litigation fixtures, bankruptcy filings, and IP. It’s an excellent idea to check the social media profiles of the company, review sites, and testimonials for an understanding of the way it operates.
3. Be alert for red flags.
It’s tempting to seek acquisitions that «rock the world», but it’s important to stay focused on your goals and how they will fit into your resources, and whether the culture of the target is compatible well with yours. Moreover, you should never be so eager to make deals that you overlook any red flags that pop up in due diligence or during the integration and change management process.
