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Acquisition is a common strategy for those businesses looking for accele rated growth. Increased reward comes with increased risk. This means that the acquisition process is time-consuming, with many legal and technical considerations…and all this whilst continuing to run your core business! The key to success is thorough planning.
1. Your Strategy
The acquisition must fit clearly into your business strategy. A long-term plan needs to be in place from the start and all key people in the business need to be on-board.
2. The Search
Establish clear criteria to identify the right target. Produce a shortlist. Take your time and be methodical. You might want to consider using an external agency for this, such as your Accountant. Often, there are benefits to being anonymous, certainly initially anyway.
3. The Approach
Carefully plan your approach. Have initial discussions to establish ‘agreement in principle.’ Confidentiality Agreements are signed at this stage. Before you start conversations, be clear on what your criteria are to make the deal work (and at what point you'll walk away).
4. Negotiation and The Agreement
Due Diligence should be performed to identify points of negotiation. Your solicitor will prepare draft agreements, which are sent to the vendor. Any changes and queries are then negotiated. Warranties are obtained from the vendor; these are legally binding assurances as to the state of the business being sold.
Integrating the businesses is, in many ways, the biggest challenge and continues well after the deal completes. Plan for this to take a while - it is important that sufficient resource is allocated to this task. Clear communication with everyone involved is the key.
“Make sure you have the right advisers working with you and have a clear plan in place running through until the change is fully integrated.”
– Paul Bulpitt, Wow
How can we help?
Wow has the expertise and proven track-record to help you every step of the way. To arrange an informal discussion on your plans: Contact Us