Acquiring a company is an ongoing strategic plan that could take months (or even years) to complete. M&A is a crucial element of growth for businesses of all sizes. Although every acquisition is different however, there are some common steps companies can use to ensure that the deal will succeed.
1. Define the strategy.
A sound M&A strategy will include the precise definition of what you want to accomplish by acquiring a company, including the growth of revenue and clients as well as tangible exposure to that site new kinds of clients. It also includes a comprehensive financial evaluation that will include your current financial situation and forecasts of the market.
2. Conduct searches
Due diligence is a crucial step in M&A and involves double-checking financial documents and conducting search on the company’s records to discover tax liens, bankruptcy filings, litigation and fixture filings as well as IP. It’s an excellent idea to look at the social media profiles of the company, review sites, and testimonials for a fuller picture of the way it works.
3. Be sure to look for red flags.
It’s tempting to search for deals that “rock the world” but it’s vital to be real about your goals and their alignment with your resources and if the culture of the target aligns well with your own. Additionally, you shouldn’t be so enthralled by deals that you overlook any red flags that emerge when conducting due diligence, or during the integration and change management process.