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Targeting And Evaluation Of Acquisition Prospects

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.


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