Whether the buying company is a serial acquirer or a firm looking for a way to reduce competition, diversify activity, or gain access to assets and technology through buying only one target, the process of identifying the right acquisition target or targets is essential. Here are some best practices in the field:
- Define the criteria for the search and the target profile – the buyer needs to determine the search criteria before even looking at potential targets. The aspects to consider the need to include the size of the target, the range of products and services offered by the target and their market share, the target’s potential for growth as well as the suitability of the target’s corporate culture for the acquirer’s culture;
- Take the time to locate all potential targets – the preliminary list is likely to belong, especially if you work with a large geographical coverage, but not all prospects on the list will be available, therefore the more initial options, the better;
- Turn to a professional – acquisition business brokers are professionals trained and experienced in locating targets as well as in performing the necessary valuations and facilitating the negotiations, along with all the other processes involved as well.