19 noviembre, 2024
M&A is a powerful way for businesses to grow. However, the process of acquiring is not without risks that can cause acquired businesses to lose their value. Following these four steps can help you avoid common pitfalls in acquisitions, and make your next acquisition an effective strategy to grow.
1. Make sure you plan your purchases.
Inadequate planning is among the main reasons for failed acquisitions. If you create an acquisition plan from the beginning, you can ensure that your company is maximising its value and remains on the right track with your M&A goals.
This involves preparing a list of M&A targets and then narrowing the list by using search criteria. These may include factors like industry sector size, deal size market share, deal size and operational scale. Corporate development teams can utilize many sources to image source find M&A companies that are worth considering, such as online sources like DealRoom and LinkedIn trade journals, industry associations and databases of investment firms as well as private equity companies.
2. Create a team to oversee the M&A process.
It is essential for management teams to form an organization headed by a senior executive who will supervise the M&A process from start to finish. This is essential to ensure that the strategic goal behind the acquisition does not get lost and that the integration process runs smoothly. It is also crucial to have human capital experts on the M&A team to calculate the cost of benefits and compensation as well as quantify the actuarial cost of pensions and other financial liabilities.
