Everyone needs one, too few have one
- Most acquisitions fail to achieve their objective – ensure yours is not one of those
- Be clear why you are looking to make an acquisition – muddled thinking at the outset will not lead to a happy outcome
- Do not overpay. Make clear at the outset to the target that you will not try and pull a fast one on the price at the last minute (all things being as they seem after the due diligence) and equally, if they try and pull a fast one, you will walk away. Where you can, make your offer contingent on buying the assets, NOT a company. That way you may get some tax allowances but more importantly avoid any hidden liabilities that could be hidden on unknown within a company. If they insist you buy the company, that becomes a basis for reduced price, to reflect the risks etc you will be taking on
- recognise there is no such thing as a merger – it is a weasel word. If it helps you sell a deal, then fine, but recognise that whoever controls the board after the deal was the acquiror, even if the money flowed in the other direction
- To not underestimate how distracting the process will be from your day-to-day responsibilities. Bring in an experienced interim (or a retired predecessor perhaps) to take on some of your regular duties or to lead the deal process for you. Traditional advisors cannot fulfill this remit.
- Whilst you are at it, find yourself a bright intern. Swear them to absolute confidentiality. Then take them everywhere as a shadow. Get them to write down everything you are asked to, or promise to do. Then get them to do the menial/routine stuff (copy this, find and send that) themselves and remind you on the rest. Do not underestimate what they are capable of. But if they are not performing, swap them out straight-away.
- Do not use your usual advisers (lawyers, accountants, property agents, whatever). It is most unlikely they are M&A specialists, but you need people who do this stuff all day every day, not a jack-of-all-trades. If they are adults (any good) they will recognise and respect this
- the lawyers will likely spend lots of time arguing over warranties and indemnities. Do not be fooled, most W & I are not worth the paper they are written on (because it is so hard to enforce and collect), never mind being worth the professional fees. Putting them in place may be a point of principle, but if you are relying on them in advance of signing, walk away now or you will almost certainly regret it
- Keep all of the telephone numbers, email addresses, websites and domain names for the acquired business. Do not leave any behind. If necessary, set up a call diversion to your main number. You do not want to lose a single enquiry through it going to those old numbers
- Read our 10 top tips on post acquisition integration