Bilal Basrai notes that difficult economic times often results in companies that have managed to weather the storm by looking to acquire those that may have been put in difficult financial strains as a result of the economy. While the process of acquisition is quite complex, these simple steps should offer an idea of what needs to be done for an acquisition to be successful.
Check Your Own Financial State
There is no point considering an acquisition if your own company is not financially stable enough to handle the additional burden. Do you have enough liquidity to carry out the transaction successfully? This needs to be answered at the start of the process.
Create A Full Forecast
Your team needs to be able to see the transaction as it is, rather than having their judgement clouded. You need them to be able to assess the transaction and forecast the potential performance of the acquisition before completing the investment.
Understand Your Goals
Never go into an acquisition without first having an idea of what your goals for the company you wish to purchase are. By knowing what you want to accomplish, you can put a plan in place to get there.
You will need to conduct a full audit of the business and determine how it is going to fit into your own business model. This step allows you to check that the value you expect from the business is actually present, ensuring the investment is worthwhile and generated a return on investment.
Create a Transition Team
Bilal Basrai notes that you will need to often retrain the company management being acquired in order to have them fit your business philosophies, so it is a good idea to put a transition team in place to help integrate the new company into the fold and ensuring it starts performing as you expect.