It’s not difficult to see that M&A is a great way for companies of all sizes around the globe to accelerate their growth. The process of acquisition is fraught with potential pitfalls that can cause businesses acquired to lose their value. These four steps will help you avoid common pitfalls of acquisition and make your next purchase an effective strategy to grow.
1. Plan your purchases.
Inadequate planning is among the most common reasons for failure in acquisitions. By developing an acquisition plan from http://dataroomplace.blog/dealroom-vdr-deal-management-software-option the beginning you can be sure that your company is making the most of its value and is in line with the goals of your M&A strategy.
This involves preparing a list of M&A targets, and then narrowing the list by using search criteria. These factors may include industry sector and deal value, market share, and operational scale. Corporate development teams can rely on numerous resources to find M&A targets, including online sources such as DealRoom and LinkedIn trade publications, trade journals, industry associations, and databases of investment banks as well as private equity firms.
2. Form a team to manage the M&A process.
It is important that management teams establish an organization headed by a senior executive who can supervise the M&A from start to finish. This is crucial to ensure that the strategy behind the acquisition doesn’t get lost and that the integration process runs smoothly. It is also essential to have experts in human resource on the M&A teams to determine benefits and compensation costs as well as quantify actuarial estimates of financial liabilities and pensions.