An attractive target is the beginning of an acquisition assessment. The first useful review connects the commercial rationale with the cost, execution requirements and risks of owning the business.
Write the acquisition case in operational terms.
Identify the capability, customer access, technology or market position the acquisition is intended to add. Compare it with alternatives such as an operating partnership or a gradual market entry. State what the buyer would need to learn before choosing acquisition as the preferred route.
Treat anticipated synergies as assumptions to test. Identify their timing, implementation cost and dependence on people, contracts or systems.
Build a consistent financial picture.
Review the quality and comparability of the available accounts, current trading, cash generation and working-capital needs. Consider how currency movements, local financing arrangements and integration expenditure could affect the buyer’s financial exposure.
Keep the stand-alone case distinct from the case including proposed synergies. This makes it easier to see which part of the rationale depends on post-acquisition execution.
Identify local questions early.
Ask qualified advisers in the relevant jurisdictions to identify the approvals, ownership constraints, employment issues, tax matters and contractual provisions that may affect the proposed structure. Which rules apply depends on the transaction and the jurisdictions involved.
Create one consolidated issues list. Each material question should have an adviser responsible for it, an expected answer date and an explanation of its possible effect on the decision. A preliminary issue map does not replace due diligence.
Plan for the first period of ownership.
Identify who would lead the business, how financial reporting would work and which operating relationships need continuity. Review the dependencies around key employees, suppliers, customers and access to systems.
Before any offer, distinguish the matters already supported by evidence from those requiring conditions, further investigation or a change to the proposed economics. Any offer wording and the legal effect of preliminary documents should be reviewed by appropriate counsel.
A clearer basis for discussion.
- Acquisition rationale and alternatives
- Stand-alone financial case and integration assumptions
- Jurisdiction-specific issues and adviser responsibilities
- A decision note setting out evidence and open conditions
Sources & scope
BCI Global editorial perspective. The preparation frameworks express BCI’s editorial approach. General business commentary; transaction-specific financial, legal and tax questions require appropriate professional advice.