Guide to Acquiring a Business
Making the Approach
How you make your initial approach is likely to determine whether there is any basis for future discussions. Remember that your approach may come ‘out of the blue’ as far as the target company is concerned and the easy option is to reject it out of hand.
Careful preparation at this stage is vital:
Assess the likely interests and motivations of the individual shareholders in order to determine whom best to approach at the target company.
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Choose your timing carefully so that the approach will be given proper consideration.
Decide who should make the initial approach on behalf of your company, whether you should use your corporate finance advisers or a member of the board or another third party who knows the target company.
Present the strategic rationale for the proposed acquisition to the target company in the right light, emphasising key intangible benefits such as cultural fit.