To Acquire, Or Not To Acquire

Created on Saturday, 08 November 2008 04:04 Last Updated on Friday, 06 May 2011 11:37 Published Date Written by Small Business Can Hits: 907

Mergers and acquisitions often play a key role in a company's ongoing growth-planning process. It may be more efficient to achieve the objectives by buying assets and resources needed for growth. A growing company considering an acquisition should always begin with an acquisition plan that identifies the specific objectives of the transaction and the criteria to be applied in analysing a potential target company.

Why?

Are you convinced that growth via acquisition makes sense compared to other forms of growth strategies (internal expansion, joint ventures, franchising, licensing)

Are you really enhancing our shareholder value and competitive position?

Analyse:

What are the synergies and efficiency effect with regard to production and manufacturing, research and development, management or marketing and distribution?

Does the deal provide growth and opportunities for your staff and retain talent?

Does it add to your income streams?

Does it achieve certain production and distribution economies of scale ?

Does it strengthen key business areas, such as research and development or marketing?

Does it protect trademarks and gain recognition in the marketplace

Are the products and services superior?

Does it penetrate new geographic target markets?

With your companies skill set , can you grow the target company to the next stage

Does it achieve greater economies of scale in production, distribution, sales?

Does it help acquiring certain patents, copyrights, trade secrets or other intangible assets which otherwise would not be available to you?