Developing an Effective M&A Strategy
How do I develop an effective M&A strategy?
If you’re pursuing a merger or acquisition to grow your business, consider the following in developing your M&A strategy:
• Industry: Do you want to grow within your existing industry or diversify?
• Price: Evaluating financing options and how much you can afford to pay for your acquisition is a must.
• Screening Criteria: Narrow the pool of potential targets to a manageable number by developing screening criteria such as levels of financial performance (Are you willing to invest in a turnaround situation?); management personnel (Do you want/need existing management to stay in place?); marketing (Do you want to manage a sales force? Are sales concentrated with a few customers?) and production processes (Is the workforce unionized? Is the target company dependent on a limited number of suppliers?).
Thinking through your objectives and the guidance of your financial professionals will make for a successful, cost-effective merger or acquisition strategy.
