Four Steps for a Successful Acquisition

M&A is an effective way for companies http://dataroomplace.blog to grow. The process of acquisition is fraught with potential pitfalls which can result in acquired businesses losing their value. By following these four steps, you can help you avoid common acquisition pitfalls and make your next acquisition an effective strategy to grow.

1. Plan your purchases.

Poor planning is one of the main reasons for failed acquisitions. By establishing an acquisition plan from the beginning it will ensure that your company is maximizing value and is in line with the objectives of your M&A strategy.

Typically, this involves making an inventory of M&A companies to target and then narrowing the list with the use of search criteria. These could include factors like industry sector size, deal size market share, and operational scale. Corporate development teams can leverage various resources to identify M&A targets, including online sources like DealRoom and LinkedIn trade publications, trade journals, industry associations, and the databases of investment banks and private equity firms.

2. Set up a team that will manage the M&A process.

It’s crucial for management teams to create a team led by a senior executive who can supervise the M&A process from beginning to completion. This is essential to ensure that the goal of the acquisition isn’t lost along the way and that the process of integration is seamless. It is also crucial to have experts in human capital on the M&A team to calculate compensation and benefits expenses, as well as quantify actuarial estimates of pension and other financial liabilities.