Guide to Acquiring a Business
General Preparation
In formulating a strategy for expansion by acquisition, thorough preparation and good timing are both of particular importance.
Consider the following:
Invest a significant amount of time in formulating a detailed profile of the type of company you are interested in acquiring, including factors such as size of business, sales mix, depth of management team, location, extent of operating synergies and likely purchase price.
Ensure that your senior management team discuss and agree the acquisition profile and that they are all committed to the proposed acquisition strategy.
Do not under-estimate the amount of time, stress and potential distraction from the running of your business that will be involved in acquiring another company.
To minimise disruption to your own business, allocate pre-defined roles and responsibilities to members of your senior management team with regard to the future acquisition process.
Consider employing the services of a corporate finance adviser to access specialist skills and experience and to reduce the workload falling on your senior management team.
Take the time to brief other advisers that you are likely to use, such as your lawyers and accountants, with regard to your proposed acquisition strategy. In this way, they will be ready to assist you when required and they may also raise at an early stage taxation and legal issues worthy of consideration when you formulate your acquisition strategy.
Discuss how you plan to finance the planned acquisition and meet with shareholders, banks and other providers of finance as appropriate to ensure that the funding will be available when required.