Merger and Acquisition Strategy Checklists for Rapid Growth

Buying growth is an effective way to rapidly expand your business. It works best when both financial and human capital is carefully evaluated and transition integration is planned in advance and implemented rapidly.

Acquisition Strategy Checklist – Can You Answer These Questions?

• What is your ultimate goal and plan?
• Why are you buying a company? Will this provide new markets, new product lines, intellectual property, quality organization and systems, key people?
• What criteria should you use for a search?
• How will you find prospects?
• Who will manage or oversee the process?
• What are your strongest “selling” points to a prospect – high price, more cash at closing, great growth opportunity we can share, remove administrative burden, etc.?
• What is our pricing and negotiation model?

Preliminary Underwriting of an Acquisition Checklist

• Why will their customers stay and transfer?
• What assurances do you have the key people will stay?
• What real risks are you missing?
• Are the company cultures the same or will they assimilate?
• Do you intend to have two units or merge into one?• How will you effectively and quickly integrate people, technology, production, etc.
• Does the financial information make sense? Do the price and terms make sense?
• Where is the synergy that will produce very high returns justifying the effort and risk?

Deal Negotiation Factors Checklist

• Have you performed an effective search to flesh out all suitable prospects?
• Are they under bank, balance sheet, or other forms of duress?
• Do you have any competitors in the hunt?
• Why might they want to be owned by you besides money?
• What is motivating their wanting to do the deal?
• What will they absolutely not do?
• Can you improve income tax outcomes and/or liability issues and renegotiate if necessary to gain the savings?
• Are we talking terms or cash and what is cash worth if it is available?
• Honestly – have you become emotionally caught up in winning or does this company meet your strategy goals?

Gregory Caruso, Harvest Associates, www.harvestassociates.com