Before you make the offer to acquire a business – Consider what happens next
Prior to making an offer, the acquirer should consider the purpose of the acquisition and re-visit the reasons for making the acquisition and how well the target fits within those reasons. The steps required are:
- Confirm the acquisition meets the deal objectives
Is the business to be run standalone or integrated?
Is the culture very different and will this inhibit the deal success?
Does the acquisition meet the objectives set out in the overview?
- Ensure the commercial due diligence checklist is linked to running the business
Understand the competitive landscape the acquisition target operates in.
Understand the management intentions and how to use the management team being acquired to best advantage.
- Plan to take advantage of the “halo” effect
Identify the areas where the quickest and most profitable extra profit can be obtained and assign people to exploit it
Assess the management organisation structure
This is a key area and great attention must be paid to achieving the following:
winning hearts and minds
getting buy-in to the acquisition vision
getting buy-in to the overall corporate vision
setting clear objectives and reporting structures
addressing cultural issues
It is often the case that every employee, not just the management team, somehow believe that the acquirer has a personal advancement plan for each and every one of them. Until the Due Diligence process is reached, the Acquirer will not even know their names. But this issue must be rapidly addressed post acquisition, particularly in small tightly knit businesses of fewer than 100 people.
- Establish the acquisition integration management team
Clear communication and fast action are important.
Make sure proper attention is focused on management training and development.
- Develop a detailed integration or rationalisation plans
A” 100 day plan” setting out in detail how the companies will be integrated is a good place to start. It should also encompass the new direction for the business and include:
People – ensure appraisals are performed quickly and understand the strength of the human capital acquired
Marketing – plan to rationalise and join the marketing efforts to maximum advantage
Customers – plan to meet with all customers and prioritise the order
Suppliers – plan to meet with all key suppliers and prioritise the order
Finance – understand the controls in place and set the guidelines for cash flow control and reporting
Systems – understand the capabilities of all systems and processes, IT, quality, customer care etc and how to integrate these
What HCBA Acquisition Planning advisors can do to assist your business. Real life experience, strategic advice and tactical support.
- Develop the value enhancing strategy
- Action-focused Business Planning
- Assistance with what follows next – a Business Support Programme to help you implement and deliver the plans
- Fund raising and acquisitions assistance
Please feel free to get in touch with me at firstname.lastname@example.org or on 07904 766230, or for more information, please check out my websites at www.klopartners.co.uk and www.peterkroeger.com