Strategic Acquisition Services

When it comes to strategic acquisition, no two companies have the same needs. We like to prepare a proposal tailored to each client’s unique acquisition needs and goals. If you would like to discuss growth through acquisition for your company, without obligations, contact us.

This is an outline of the assistance that we can provide, from evaluation through close. Of course not all companies will require all of the outlined steps.

I. Define Company’s acquisition goals

• Is acquiring practical in your situation?
• Common Rationales
• Gain market share
• Increase revenue
• Grow faster with less risk than traditional marketing
• Easier financing
• Gain distribution channels
• Product line expansion
• Geographic expansion
• Utilize idle capacity
• Enter new industry quickly with less risk
• Financing (Overview of possibilities.)
• Detailed plan once deal is in process

II. Define Target Search

Once the acquisition goals are established, we will work with you to set the parameters of the search. This may include setting parameters of geography, size, etc. It may also involve specific competitors that you would like us to approach (and who you may want us to avoid). The basic steps include:

• Compile list of targets to conform to goals
• Work with you to modify or amplify list
• Prepare contact method to defined targets

III. Find Targets (deal flow)

Finding targets is what we do best. This includes finding gray area sellers; those who are not actively selling their companies but may consider a proposal if its presented properly. While there are a number of methods we use to find appropriate targets, here are the basic elements of an acquisition search:

• Review our proprietary databases of possible sellers
• Use our proprietary search tools for public databases. We have developed software tools that are designed to search public databases for possible sellers.
• Query other intermediaries and brokers with whom we cooperate
• Contact gray area sellers directly (those who are not actively marketing their businesses, but may be open to selling) by postal mail
• Contact private equity groups that by nature are open to selling companies they own
• Search for corporate spin-offs that are not well publicized

IV. Initial Contact with Target

After contacting the universe of prospects, the next step is to have conversations with those prospects to determine which are serious and which are worth pursuing.

• Field and screen target’s responses
• We know how to work with entrepreneur sellers!
• Their motivation may be different than professional management
• Always want more than worth
• Decisions don’t need to be based on business logic

V. Confidentiality

• Obtain signed confidentiality agreement from target, and client

VI. Systematize Target Information

To the extent that seller is willing, we like to get financial information at this point. In some cases, sellers prefer a brief meeting or conference call first (next step in our outline).

• Obtain financial and descriptive information from target
• Full financials if possible, if not, at least a financial summary
• Recast financials to fairly reflect business performance of target
• Recast financials to reflect post-acquisition advantages

VII. Meeting, Client and Seller

Once a prospective seller has passed through our screen for seriousness and appropriateness, we like to set up a conference call between you and the prospective seller. The goal is for both buyer and seller to determine if further discussions are warranted.

• First Conference Call
• Perhaps an informal get to know each-other meeting, typically a lunch or dinner.

VIII. Financing

If you desire, we can help with designing financing structures and help obtain financing

• Evaluate possibilities
• Pros and cons of each
• Assist client in obtaining financing if desired

IX. Negotiations (Leading to LoI)

Buying a business is a complex transaction. It’s more than price that needs to be worked out. For example, there is also;

• terms: how much of the payment is in cash, how much is owner financing, owner financing, s any of the payment contingency based, and much more
• structure of sale (stock sale, asset sale, etc.)
• non-compete: the scope and the duration of the non-compete agreement needs to be worked out
• how long will seller(s) stay with the business, with what responsibilities, and on what compensation terms
• and much more.

X. Due Diligence and Finalizing

Due diligence involves verifying that the business as it’s being presented. This involves checking though records, and in some cases talking to customers, suppliers, and even employees of the selling company. We can certainly help with due diligence. However, you will also need your CPA for due diligence and attorney for preparing and reviewing Purchase & Sale agreement.

XI. Closing

There are many steps leading to the closing and many brush fires on the way. We can help put out the brush fires and guide the deal to a successful close.

Are you interested in growing your company by acquisition? Contact us. We’ll be happy to discuss the possibilities with you without cost or obligation.