Understanding the acquisitions process is essential for any company considering rapid growth through acquisition. From beginning to end, the process can take anywhere from six months to several years, and when you have a better understanding of the process, it may help you decide whether or not to pursue an opportunity.
Steps in the acquisitions process
The first of the acquisitions process calls for developing a strategy by which you will acquire another business, and coupling that with criteria to be used for your acquisition. Then you would have to undergo an extensive period of searching for just the right target company to pursue, presumably one that is either in your same market, or one which allows you to diversify your offerings by expanding into another market.
When you have identified two or three suitable opportunities, you can begin acquisition planning, which will include valuing those companies and analyzing just how they might complement your own business. If you still have at least one viable candidate after this analysis, you can then begin a period of negotiation with that company, assuming that they are willing to be acquired.
If there is no opposition to the acquisition, you can then begin a due diligence phase, in which you investigate everything about the company and its history, so that you can be sure there are no unpleasant surprises that will pop up later. Having found that your acquisition target is still viable, you can then begin developing a purchase and sales contract which would be agreeable to your target company. After securing the necessary financing to go through with the acquisition, you would then be able to actually implement your acquisition, and begin the process of folding the target company into your own.
Thinking of making an acquisition?
Acquisitions can be one of the fastest methods for making your business grow, and if you’ve been considering a specific acquisition, we may be able to offer financial assistance. Contact us at Rotay Capital Finance, so our financial specialists can discuss some possibilities for funding your project.