Targeting And Evaluation Of Acquisition Prospects

Created on Tuesday, 11 November 2008 04:04 Last Updated on Friday, 06 May 2011 11:37 Published Date Written by Small Business Can Hits: 939

You need to specify target industries and criteria for evaluating candidates for acquisition within these industries.
Such as:

the companies' desired size and location

how they are to be found (internal search, intermediaries, unsolicited offers)

range and rates of a target company's revenues, growth, earnings and net worth

the desired demographics and buying habits of the seller's customers

the source of acquisition financing (including logistics for obtaining capital, and the targeted amount and method of payment)

your tax and financial preference for asset vs. stock transactions

financial returns desired and operating synergies to be achieved

impact of the acquisition on existing shareholders

possible competing bidders for qualified candidates

members of the acquisition team and each of their roles

nature and types of risks you are willing to assume, including your willingness to consider turnaround or troubled companies

desired geographic location of the target companies

your company's intentions regarding retention or replacement of the target company's management team (even if this plan would change when a different company is acquired)

your openness to partial ownership of the seller's entity or willingness to consider a spin-off sale, such as the purchase of an operating division's assets or a subsidiary's stock

your interest in launching an unfriendly takeover of a publicly-held company or buying debt from the largest creditor of a privately-held company.