Acquisitions can have significant effects on growth. However, the results of an acquisition could vary depending on how it is carried out. Most successful buyers follow the same steps that guide them through the M&A process.
The initial step of M&A is to define the motivation behind an acquisition. This will give you an outline for any subsequent actions and decisions. Acquirers who are clear on their motivations will be more likely to avoid common pitfalls of acquisitions such as seeking out multiple targets, jumping into an acquisition prior to completing due diligence and paying too much for a business that may be unsuitable in terms of both strategy and culture.
Once you have a clearly defined purpose then the next step is to formulate detailed search criteria for companies you want to target. This should include factors like industry focus, geographic location as well as financial health and intellectual property concerns. The top M&A firms make use of numerous sources to find potential candidates. These include databases and online portals. They then refine their list down to “A” or “C” deals.
After a long and often challenging due diligence process, the features and functions of DealRoom final step is to develop an organizational narrative. This is the story that will be presented to customers suppliers, customers, and competitors, so it’s important that it’s positive. Additionally, it’s important to think about the impact an acquisition could impact your P&L and balance sheet.