About 77% of company acquisitions fail. Don’t let that number scare you off from an acquisition. Based on my observations as an M&A consultant, I’ve found most acquisitions fail due to widespread misunderstandings of the process. Head over to the ACG National Capital Blog to read my list of some of the most common mistakes …
Category: M&A and External Growth
Acquisition: A Team Sport
Throughout my blog I’ve stressed the importance of carefully planning your business strategy. While planning is important, your plan to buy, no matter how well crafted, is only as good as the people who execute it. Acquisition is a team sport for two reasons. Practically speaking, buying a company involves multiple skills—more than any single …
The Letter of Intent: A Gentleman’s Agreement
The Letter of Intent is more than a document in the acquisition process—it’s a milestone. The LOI serves as an important legal document, but it also brings a new level of commitment and resolve to the deal. I would caution against leaving the LOI to the “experts”. Although you are deep into the acquisition process …
Making First Contact with an Owner
Making first contact with an owner and important step in the acquisition process. It is your opportunity to get your foot in the door and start a positive relationship that could lead to acquisition. So, how do you go about contacting owners? In my post for the ACG National Capital Blog I outline how to initiate …
Negotiation: Take Notes!
I cannot overemphasize the importance of writing everything down during negotiations. Once an item has been discussed and decided upon, have someone from each party initial the notes to confirm the completion. Maintaining a written record helps to keep everyone on the same page. Without such a record, you run the danger of having two …
Six Key Questions in Negotiation
Before you enter negotiation with an acquisition prospect, there are six key questions you and your acquisition team should answer: 1) What is the “big picture”? The key here is to have just one strategic reason for acquisition that you developed at the beginning of the acquisition process. 2) What elements of the “owner’s equation” …
Striking a Balance in Negotiation
When approaching negotiation for an acquisition, it’s essential to establish the right mindset from the start. You should strike a balance between negotiating firmly on the one hand and protecting your relationship with the acquisition prospect on the other. Any potential deal suffers tremendously when the parties become combative. You can be a tough negotiator …
Why Owners Say “No” to Selling
I have rarely found an owner who, when asked if he would consider selling his business, immediately says, ‘‘Yes, I want to sell, and I want to sell now.’’ If you did actually get an immediate yes, this might well indicate weakness on the part of the prospect. Most often, though, the responses you will …
Valuation: Flowers Food buys Wonder Bread
Valuation is a key component of the acquisition process that is widely misunderstood, because people tend to adopt a narrow financial perspective. Valuation should be anchored in your strategic rationale for buying another company in the first place. It all comes back to your business strategy and the synergies that will be created by the …
Quality Research: A Key to Successful Acquisitions
Quality research is an important part of the acquisition process. Thorough research allows you to fully understand the market and prospects for acquisition. In the Association for Corporate Growth (ACG) blog, I explain how to effectively conduct primary and secondary research, including who to contact and how to overcome challenges you may encounter during your …
