Steps For a Successful Acquisition

Steps For a Successful Acquisition

It is easy to get caught up in all the excitement around mergers and acquisitions. However, there are many important steps a company has to follow to successfully complete an acquisition. A successful M&A requires careful planning, a clear communication strategy, and diligent execution.

Make a plan. Many companies advance myriad reasons for pursuing an acquisition–purchasing international scale, filling portfolio gaps, building a third leg of the business–but the most successful acquirers have specific and well-articulated ideas about how their acquisitions will create value.

Form a team. The M&A team should consist of members from the executive management and board of directors of both the acquiring and target companies, in addition to outside advisors who are experts in acquisitions. This team will determine the goals of the sale, identify potential targets, and evaluate potential buyers.

Conduct an in-depth due diligence. It is standard for buyers to require extensive documentation and speak with several people prior to making a decision. The buyer’s review can be lengthy so sellers must be prepared to disclose details as soon as they can and assist in the process. The seller should seek final board approval immediately after the due diligence process is completed.

Develop plans for integration. It is important that the buyer has a team member who is capable of dedicating significant time and effort to the integration. This person should possess the required skills and resources, as well as the ownership for that the transition is successful.

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