5 tips for a successful acquisition

Common objectives

Firstly, make sure that both businesses have shared business goals and objectives.

Do a lot of research and ask a lot of questions to identify any areas that you may disagree on or are likely to cause friction between the two businesses.

You should be able to establish some common ground in terms of the overall mission of each business, to confirm that the acquisition is in the best interests of both companies.

Planning

There’s a lot to think about when acquiring another business; the legal implications, tax considerations and how to effectively restructure the business, for example.

It makes sense to enlist the services of a business advisory specialist - an experienced expert who has seen it all before and can guide you through the acquisition process.

Liquidity

It’s critical to assess both the liquidity in the company you are acquiring, and the liquidity in your own business to ensure that it is sufficient to safeguard the continued growth and success of the combined businesses.

Without assessing your available funds, entering into an acquisition could put your business at risk and make the transaction unsustainable.

Due Diligence

You can’t take any shortcuts with due diligence; it gives you the opportunity to investigate fully the business you are buying, validate what has been claimed by the seller and identify any red flags.

Companies planning to acquire a business should insist on receiving full financial and business disclosure from the seller in advance of the acquisition.

Due diligence should include details of the structure of the organisation; assets, audited financial statements, intellectual property, contracts, employee records and tax records.

Culture and integration

So often overlooked, but so important - is the culture of the business you are acquiring a good fit with your own?

If the cultures are very different, it is not necessarily a bad thing - provided you are aware of it and take steps to ensure that the two business integrate successfully.

Ensure that your combined workforce communicate openly from the start to establish an integrated and successful working relationship.