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.
Due Diligence
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.
