Acquisitions can have an impact on growth. The outcome of an acquisition will differ according to how well the deal is carried out. The most successful acquirers adhere to an established set of steps to guide them through the M&A process.
The first step of M&A is to determine your motivation for an acquisition. This will provide you with the framework to guide your future actions and decisions. Acquirers with clear motivations will avoid common pitfalls of acquisitions, such as trying to meet multiple targets, hurrying to close on a deal without having completed due diligence, and paying too much for a business that’s culture and strategy do not align with their values.
Once you have a clearly defined purpose, the next step is to formulate specific search criteria for companies to target. This should include factors such as industry focus and geographical location, financial health and intellectual property factors. The best M&A firms use many sources to find potential candidates. These include databases and online portals. They then narrow their list to “A” or “C” deals.
After a long and challenging due diligence process, the final step is to create an organizational narrative. This is the story that will be shared with customers, vendors, and competitors, so it’s crucial to make sure it’s positive. It is important to consider the impact that acquiring will have on your P&L and your balance account.
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