Strategic growth through acquisition is an excellent way to bring your company to the next level. Rather than taking the time to slowly build capabilities in-house, acquiring companies with strong synergies can help you scale more quickly. Here are the basics to help you get started.
STEP 1 – Define Your Criteria. What operating capabilities and efficiencies are you looking to gain? Or are you simply looking to grow in size through acquiring a competitor? Before you begin your search, you’ll need to carefully define the business opportunity you are seeking. You’ll also need to assess your company’s financing options to set a realistic purchase price range for your target company. This is critical to streamlining the search process and ensuring you meet your acquisition goals.
STEP 2 – Company Search & Outreach. The next step is research companies that meet your search criteria, then contact the executives of those companies to see if they are interested in selling. Your M&A Advisor will have tools at his/her disposal to seek out qualified companies and vet them prior to contacting them. Working with a broker will help make the entire process run more smoothly and allow you to continue focusing on your current business while their firm does the heavy lifting.
STEP 3 – Due Diligence. Once you’ve solicited interest from prospect companies, initial due diligence begins, along with management meetings and valuing the acquisition. Due diligence allows you to further qualify the company and investigate their operations to ensure they are right fit for your acquisition. Negotiating the right confidentiality agreements should enable to you access all the information you need to make your final decision.
STEP 4 – Letter of Intent, Negotiations and Final Due Diligence. If all goes well, you will submit a non-binding Letter of Intent (LOI) to the company you wish to acquire. This will outline basic terms of the agreement, provide a framework to perform further due diligence and negotiate a binding Purchase Agreement (PA) on an exclusive basis.
STEP 5 – Closing & Integration. When the negotiations are done and the final deal has been hashed out, a closing will be scheduled where all parties involved will be present to sign the final documents. After closing, it is time to work on integrating the companies together in order to capture the full potential of the acquisition. This requires careful planning and quick action to communicate with employees, customers and suppliers successfully.
One of the Most Active M&A Advisory Firms in the Region
VR Business Sales New Haven represents owners of businesses valued between $500,000 and $25 million or with annual revenues from $1 million to $30 million. The office provides exceptional merger and acquisition (M&A) advisory services to companies operating within a wide range of industry segments in Connecticut, Southern New England and Metro NY. Independently owned and operated, the office consistently ranks within the Top 10 of over 50 offices worldwide with the VR franchise network.
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