Successful acquisitions start with Remarkable Preparation. Grooming the team and setting yourself up for success. Start with these questions.
- Are you clear on your specific market? Remember you get to define the sliver you want to rule! This will be crucial in defining the type of targets you wish to pursue.
- Can you produce a one page, shopping list, detailing the type of targets you want to acquire? –
Have you ensured these types of companies exist? (It does and can happen that your shopping list is a dream with few if any targets that fit your criteria)
Have you established the roles of your senior management in the acquisition process?
Have you role played how you would integrate different types of targets?
Have you rehearsed several post acquisition people integration scenarios? Particularly important to consider your tactics with respect to the owners.
Have you set up the financing required or set up financing partners subject to the merits of each deal?
Have you rehearsed the big story of why you are growing by acquisition? (Audience includes, shareholders, target owners, banks, staff)
Have you looked at the marketplace to establish the top 30 players and their relative size? It will key to have a strong grasp of your own market when you are in front of target company owners?
Have you listed the key exposure areas within these targets that require early discovery work? Eg IPR, patents, quality of code. These typically are deal breakers and therefore are better known earlier than later.
- Narrow definition of activities using NAICS codes
- Business model, SaaS, legacy client, maintenance stream
- Product v service
- Geography – think post acquisition integration
- Legal status, private, division of public, VC owned etc
- Number of employees
- Growth of Revenue, size of revenue
Answers to these questions will groom the team and allow them to execute a world class process of: finding, assessing, valuing, negotiating, validating and closing the right deals at the right price. It will also bring out the help required if any.
The Portfolio Partnership designs and executes acquisition strategies in partnership with our clients.