Studies at Harvard, Deloitte, Wharton and other credible organizations show that more than half of acquisitions destroy value, and that only 25% of transactions create sustainable ongoing value (these numbers don’t reflect acquisition efforts that fail to be completed).
How to become part of the 25% that create sustainable ongoing value?
Companies that concentrate on clarifying measurable objectives and are able to accurately define their own strengths and weaknesses find it easier to articulate the specifications of a superior candidate.
1 + 1 = 3
Locating a significant number of qualified superior targets makes it more likely to find just the right fit at an appealing valuation.
Developing a warm approach that starts conversations of promise is a useful and teachable skill.
Knowing where to find and how to reach candidates has become far easier with the arrival of each new database offering (way easier than just a few years ago).
A benefit of casting a broad net and maintaining a significant database of good candidates grows the potential for joint ventures that can become great candidates later on.
It is also easier to grow a pool of superior targets by allowing a broader definition of deal making to include joint venture, people, and technology.
Starting and maintaining relationships with well chosen companies allows transactions to grow out of mutual benefit and understanding. A good fit, familiarity, and awareness reduces risk in acquisition.
Growth through a slightly expanded definition of acquisition means more qualified candidates, greater knowledge, & better transactions.
Join our small group discussion April 6th at the Edina Country Club;
Or contact me to continue this conversation.