How to Build a list
Potential strategic acquisition or merger targets are companies that you identify which present potential opportunities to either acquire or merge with. Normally these companies are identified on the basis that they could present a range of strategic benefits to your business, including but not limited to access to new geographical markets, access to superior technology and ideas, or increased growth.
So what considerations should you make when building a list of potential acquisition or merger targets? We have identified four key considerations below; however there may be many more items to consider pending your own circumstances.
1. Identify businesses that compliment your own company’s strengths and weaknesses. For example, if your company is slow to develop new and innovative products, you might identify businesses in your industry with market leading research and development capacity.
2. Understand your company’s own financial position. For merger proposals, consider what funding your business may be able to offer as part of a merger deal. For acquisitions, consider what your budget is, and accordingly, what size companies you can target.
3. Look beyond the usual suspects. When compiling a target list of potential acquisition or merger targets, it pays to look far and wide, beyond those companies that may be known to you. Here at Quinn M & A, we use a range of international and domestic deal sourcing tools, in conjunction with a range of databases to ensure all potential acquisition or merger targets are identified.
4. Research your potential targets. It is important to find out as much as possible about any of your potential target companies to ensure they align to your merger or acquisition goals. As part of this, identify any issues or risks with relation to the potential target company. These risks could include high staff turnover, a poor brand image or a range of other considerations. Weigh up these risks when considering whether to include the company on your target list.
By observing these four considerations, you can be certain that your list of strategic acquisition or merger targets will provide ample scope to bring your company fantastic strategic benefits.
If you are seeking a professional advisor to assist you with the merger, acquisition or divestment of a medium-sized business please contact Quinn M & A on 02 9223 9166 or email info@quinnma.com.au to find our nearest office.
