It’s not a secret that M&A is a successful method for companies of all sizes across the world to speed up their growth. The acquisition process is fraught with potential pitfalls that can lead to acquired businesses losing their value. Taking time to follow these four steps for an acquisition that succeeds can help you avoid common pitfalls and ultimately make your next acquisition a winning strategy for growth.
1. Make a plan for your purchases.
One of the most frequent causes of failed acquisitions is poor planning. If you create an acquisition plan from the beginning, you can ensure that your company is maximising its potential and staying on the right track with your M&A goals.
Typically, this involves creating an initial list of M&A companies that are a good fit and then narrowing the list by the use of search criteria. These could include factors such as the industry sector, deal size and market share, as well as operational scale. Corporate development teams can use a variety of resources to identify M&A companies that are worth considering, such as online sources like DealRoom and LinkedIn trade journals and industry associations, as well as databases of investment firms as well as private equity firms.
2. Create a team who will lead the M&A Process.
It is crucial that management teams establish the team under the direction of an executive in the top position dataroomplace.blog/which-process-can-be-accomplished-with-due-diligence-data-rooms/ who will oversee the M&A from start to finish. This is crucial to ensure the strategic intent behind the acquisition does not get lost, and that the integration process runs smoothly. It is also crucial to have experts in human resources on the M&A teams to estimate the cost of benefits and compensation and quantify actuarial estimations of financial and pension liabilities.