Guide to Acquiring a Business
Entering into Discussions
In the event of a favourable response to your approach, it is important to try to manage and control the acquisition process in order to avoid the entry of potential competing bidders and to retain interest and momentum.
Key steps are likely to include the following:
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Persuade the target company that you are only prepared to conduct discussions on an exclusive basis and that you will terminate discussions if another party enters into talks with the target company.
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Be prepared however. Assess the likely identity of any potential competing bidders, their key selling points and motivations and address these in your own continued selling to the incumbent management team and shareholders.
Maintain a good relationship. Having an intermediary between yourself and a potential purchaser can help take the heat out of points in the negotiations that might otherwise become confrontational.
Using a corporate finance adviser also helps maintain confidentiality, which is often crucial to protect your business and that of the target company.
Assess how best to structure the acquisition proposal, both in financial terms and in other ‘soft’ areas and negotiate the best deal.