One enters into a rather specific process when one decides to acquire a business and particularly the “right” business. You must manage and control the process if the result is to have a good chance to be the desired one. The acquisitions process involves several distinct steps and sub-steps that need to be attended to with extreme care and dealt with expertly and skillfully.
These steps are the following:
1. Know what you want to acquire.
2. Set up criteria to guide you on what you want to buy.
3. Set up a plan on how you will proceed.
4. Identify/build a team that will work, do, and manage the process with you.
5. Develop a network of credible sources for acquisition candidates.
6. Screen carefully and thoroughly the candidates using the criteria set.
7. Conduct an effective preliminary evaluation/due diligence before you spend a great deal of time and money.
8. Negotiations really begin at the first meeting with the owner or his/her representatives. Preliminary agreements take place then and should be included in a letter of intent.
9. Involve your attorney early in the process and also with the letter of intent.
10. Conduct a thorough evaluation/due diligence. Look for surprises, but do not panic.
11. Develop a detailed action plan and complete it before you close the deal.
12. Review the value and price of the business with your colleagues.
13. Negotiate the purchase agreement with the full participation of your attorney.
14. Close the deal.
15. Have an all employee meeting in the acquired company very soon after closing, immediately if possible.
16. Present / discuss plan with the local management first.
17, Begin implementation of the action plan immediately.
18. Most important, meet as many people of the company as possible during the acquisition process. Do not wait to meet them after you close the deal.
Reference Book: “How to Acquire the Right Business”, Xlibris Corporation, 2009
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