Acquisition Questions Your Investment Bank Won’t Touch

Acquisition Questions Your Investment Bank Won’t Touch

Executing an acquisition strategy successfully can deliver tremendous benefits. It offers the ability to quantum leap growth, produce economies of scale, enhance technical capabilities, acquire special people, and capture attractive customers. However acquisitions are also a graveyard of failures with a history of under delivering on shareholder value. Your investment bank may have identified, approached and assisted in closing the deal of the century but you, the acquirer, must answer a set of post completion, operational questions to ensure the deal delivers shareholder value. The successful integration of the target will be the deciding factor in the success of the deal not price. Although I recommend you don’t over pay!

Top 10 Integration Questions to Solve 

  1. How will you inform the target’s staff they have been acquired? Remember a deal often produces the “haves” and the “have nots”. Employees who are not part of the shareholder register or are not part of the options pool, may feel like second-class citizens. How will you motivate them? Story telling is important. People want to have a purpose.
  2. How will you consolidate the financial results of the target using your accounting policies post-completion? How will you consolidate cash flow forecasts?
  3. How will you control the bank account of the target?
  4. What system integration issues need solving?
  5. How will you introduce yourself to key customers?
  6. How will you train the new sales team acquired in your products if relevant?
  7. Do you have an issue with different salary packages and commission structures between the two companies? What if the target’s staff are better paid than your own staff?
  8. Are there any compliance issues at the target that require emergency attention eg ISO 9000, employment conditions, health and safety, 401k rules etc.
  9. How will you review the quality of the sales pipelines going forward? How do you keep sales driving forward?
  10. What issues came up in due diligence that need fixing in the first 30 days, 60 days or can be fixed over longer time periods?

Post acquisition integration is a specialized support service of The Portfolio Partnership. Quality integration thinking starts at the planning stage NOT when you own the target. Reach out to me at ian.smith@portfoliopartnership.com.

 

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