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ENTER THE MARKET BY JOINING WITH AN EXISTING PLAYER

Growing a Business by Merger or Acquisition

Opportunities to grow by merger or acquisition may exist where the target business:

  • Is undervalued
  • Does not use its assets to maximum effect
  • Would benefit from relocation
  • Has poor management
  • Has managers who want to leave or retire
  • Has complementary products or services which, when combined with yours, will enhance the offering to customers

Identify Target Company

The most effective way to find a target is usually through using a professional advisor in your sector. They should be experienced in handling transactions similar to the size of both yours and the target business. Although you should typically ask for a shortlist of ten potential businesses, you would normally pay the bulk of the advisor’s fee when you have successfully completed business with the final target.

Due Diligence Process

  • Due diligence is an investigation of a potential investment (such as a stock) or product to confirm all facts and to ensure the purchase will meet the buyer’s needs.
  • You should consider a variety of factors when performing due diligence on a stock, including company capitalization, revenue, valuations, competitors, management, and risks.
  • By taking the time to perform due diligence on a stock before making a purchase, you’ll be better equipped to make a decision that aligns with your overall investment strategy.

Valuation and Closure

Once you’ve completed all steps, you should be able to evaluate the company’s future profit potential and how the business might fit into your investment strategy.

Inevitably, you’ll have specifics that you will want to research further. However, following these guidelines should save you from missing something that could be vital to your decision.

YOU MAY CLOSE THE DEAL.

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