Evaluating and Wooing the Target
Having identified a target or made a shortlist, the
acquiring company will have to woo the target if it is
not actively considering disposal. It is important to
establish a process for monitoring changes in the situation
of the target company: these could include a change in
market position, management change or the entry of an
aggressive competitor into the market-place. Being well-informed
may make all the difference between a successful or unsuccessful
acquisition.
Checklist For Evaluating Target Companies
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Ascertain the real reason for sale
if the company is up for sale.
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Determine whether the company has been
dressed up for sale.
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Find out as much about the business
prior to negotiation as possible.
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Spend time and money on market intelligence.
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Attempt to quantify hard and soft
synergies.
Regular progress meetings should be scheduled during the wooing
stage. Communication is essential to build up trust between the
parties and to develop a mutual understanding of each otheršs
businesses. Logic supported by analysis is essential to convince
targets of the advantages of selling. During a protracted process
of negotiation it is sometimes easy for corporate attention to
wander: it is therefore advisable to keep the process alive and
active and maintain high interest levels.
Some caveats and hints continued in subscribers
section
and other headings in the report
Approaching the target and negotiating
The importance of research
Planning an approach
Dealing with the vendor Professionals
Negotiating Techniques
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