Evaluating a Target Company

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

• Ascertain the real reason for sale if the company is up for sale.
  
• Determine whether the company has been dressed up for sale.
  
• Find out as much about the business prior to negotiation as possible.
  
• Spend time and money on market intelligence.
  
• 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 others 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.
  

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