Featured Image Caption: Acquisition Integration Plan
The business acquisition has been a way by which some companies look to expand their operations. For the longest time, acquisitions have become the most preferred strategy to weed out the competition, get a large pool of talent at one place and find key stakeholders.
In the last few years, there has been growing awareness and interest surrounding mergers and acquisitions. The start-up ecosystem has provided fuel to fodder. Bigger corporations are looking at acquiring start-ups and creating specialized verticals for their organization.
However, whatever your need to pursue an acquisition, you need to be careful about the way you move forward. If you are looking to make an acquisition work, you need to be guarded, thorough with the financials, and aware of the liabilities of the other company.
In this article, we are going to look at five critical elements you need for a successful business acquisition. If you are a business owner looking to acquire a different business to fuel your growth, please pay attention to the contents of the article.
List of 5 Critical Elements you need for a Successful Business Acquisition
Getting Help from the Best Legal Experts-
An acquisition deal has so many loose legal ends that you need to deal with. Most business law firms do not have the skill, expertise, or experience of helping out with complicated legal processes like acquisitions. This is why you need experts like BSA Ahmad Bin Hezeem & Associates LLP to help you with doing due diligence and drafting the paperwork. There might be several revisions that might have to be made along with negotiations. If you do not have the best legal assistance, you will fail to protect your financial interests during the deal.
Having a Defined Communication Strategy in place-
One major reason why most acquisitions fall through is poor communication. The two companies and their legal representatives are not able to communicate effectively. This may come as a shock, given how well learned and qualified these professionals are, it is true that poor communication spells the end of many acquisition deals. Make sure to have a definite point of contact in both the companies, along with having pre-determined dates and timeframes for holding meetings. Decide on the method of communication in advance.
Doing Due Diligence on the company acquired-
Leading businesses that are on the lookout for companies that they can acquire start secretly gathering paperwork about their functioning for a long time. Sometimes the process of learning about the other company starts two to three years before the first outreach for acquisition is even made. The earlier you start, the better you will be prepared when it will come to holding negotiations. Make sure you are looking for liabilities, debts, and secret partners or directors that might end up causing trouble when the deal has progressed to its later stages.
Taking into account the Interests of Leaders and Stakeholders-
You cannot have someone junior in your organization heading the acquisition discussions. If this is something serious for your business, you need to lead with the topmost management. In other words, CEOs, CFOs, CTOs, and Founder-Director should be the ones leading the discussions. This demonstrates seriousness and showcases strong intent. If you are not pulling rank in acquisition deliberations, you will most definitely end up with the short end of the stick. This will compromise your judgments and decision-making. Out the stakeholders first.
Plan for the Post-Acquisition Integration with a Team-
As a business organization, you do not want to wait for a very long time before you start getting the employees of the acquired organization onboard. If you wait for too long, many employees might simply resign and look for new opportunities. You need to get the team that will help with the acquisition integration to start playing an important role from the very start. If this does not happen, half your hopes and expectations from the acquisition will fall flat. Every vertical needs to be aligned and teams should be introduced to one another as soon as possible.
The Final Takeaway
Strong preparations, great legal assistance, and intervention from the leadership can help engineer successful acquisitions. When it comes to acquisitions, there are tons of things that can go wrong. You might be in talks for a year or so and completed 99% of the formalities, but when one small detail comes to light, you might be forced to call off the talks. This is why doing your research and due diligence is so important.