You have a Board Paper to write summarizing the benefits of acquiring your smaller competitor. You want to make an impact with a one page executive summary of why it’s such a good deal. What do you cover? Here some questions you need to answer:

  1. What is the total cost of the acquisition pre and post earn out?
  2. What is the logic of the price? – covering:
    • Profits adjusted to reflect your ownership
    • Multiples used -PE basis, Price to Sales, Price to Net Assets.
    • If an earn out deal is proposed, highlight the initial PE and demonstrate that exit PE is lower when the earn-out completes.
    • Previous deals done in the industry with prices & multiples paid.
    • Highlight specific savings if any you are building them into the logic. Note who is leading the cost savings project and the timetable for achieving them.
    • Highlight the ROI covering the total acquisition costs.
  3. What is the essence of the post acquisition strategy?
  4. What is the strategic case for the deal?
  5. Are there any regulatory hurdles still to be overcome?
  6. What was the most material issue uncovered in due diligence and how is it factored into the deal?
  7. What are the potential negative impacts of the deal and how are we trying to mitigate them?
  8. What impact if any will there be on our management structure?
  9. What’s the likely impact on our market share, our sales by industry, sales by territory?
  10. Will it have a positive or negative impact on any of our Key Performance Ratios?
The Portfolio Partnership designs and executes acquisition strategies in partnership with clients using our Acquisitions Approval Model™ process.