An acquisition deal is when a business purchases another entity for consideration, such as cash or stock. The acquiring company often seeks to improve its competitive position, grow into new markets or products, expand into a larger geographic region or gain access to cutting-edge technology to remain ahead of the competition and meet evolving customer needs.
When preparing for an acquisition, companies should consider their unique attributes and identify what types of buyers will be interested in them (learn how to position your company for success here). Developing a list of potential acquirers and identifying the individuals within those organizations who are champions for your product can help you gain traction when it comes to attracting an acquisition deal.
You should also look at the buyer’s track record of completing successful acquisitions and their financial capacity and resources to ensure that the purchase price you are able to negotiate is fair. You may also wish to ask about a buyer’s industry experience, which can be a valuable asset in guiding them through the complexities of your company and market post-transaction.
Finally, you should always listen for a buyer that shares your vision and values for the future of your company. If a buyer’s goals don’t align with yours, they are not the right match for you or your business and can lead to failure of your company post-acquisition. This lack of synchronicity should be an immediate red flag that should not be ignored.