Acquisitions are an essential business process that has significant impact on growth. The results of an acquisition may differ according to how well the deal is executed. Most successful acquisitions follow the same steps to guide them through the M&A process.
The first step in the M&A process is to define your motivation for acquiring. This will give you a framework for all future actions and decisions. Acquirers who are clear about their motivations are more likely to avoid the common pitfalls associated with acquisitions, such as seeking out multiple targets, jumping into an acquisition before due diligence is completed, and overpaying for a company that will be a bad fit in terms of strategy and culture.
After you have determined your purpose The next step to do is formulate detailed criteria for identifying potential target companies. This should include factors like geography, industry focus and financial health as well as intellectual property concerns. The best M&A teams use a number of sources to identify potential candidates, from databases to online portals and then make their list more specific to «A» and «C» deals.
After a lengthy and sometimes difficult due diligence process, comes the final phase which is creating a company’s story. This is the story you will tell your customers as well as suppliers and competitors. It is therefore crucial to tell a positive one. Finally, it’s also important to consider the effect that an acquisition will impact your P&L and balance statement.