Target Selection Mergers and Acquisitions - Jeremy Gray

 Jeremy Gray – 6 of Season 4 Target Selection Mergers and Acquisitions
 
IBGR.Network - PROFIT Radio. Everything a business owner needs to start, grow or exit a business. GROW WITH US.
 
INTRODUCTION
Today is the second of four shows on the topic of M&A and we will look at target selection. This is the second most important step leading to success; only integration planning is more important. Between selection and integration, there are many important steps but these are predominantly procedural, that is there is a structured way of doing things. Valuing the business, preparing the letter of intent, due diligence and contract negotiations can and will be described. The biggest risks here are paying too much and ignoring red flags that mean you should walk away from the deal.

Show Objectives - The Why

• M&A can be the fastest way to grow your business.
• Organic growth can slow as you get bigger
• If the fit with the target company is not right chances of success are diminished - AOL Time Warner
• Key elements of fit include Size, business alignment and culture,

Key Issues - Owner Perspective:

• M&A carries risks - HBR estimates that 70% to 90% of acquisitions fail.
• Poor fit is a leading cause of failure - Daimler Chrysler
• Being overly ambitious can lead to taking on more than can be managed by your organization
• Why are you considering M&A?
  • Horizontal integration or market expansion
  • Product/Service extension
  • Backward integration
  • Forward integration
  • Management expertise?
  • Free form acquisition
  • Opportunistic acquisition
  • How does this tie to your strategic plan?

• Funding - how will you fund your acquisition?
• Regulatory environment.

 
What You Need to Know - The What

• Making an acquisition is similar to landing an new customer
• Takes time and persistence
• Inside out - Look at your current business and identify opportunities for expansion
• Outside in - Identify markets with high growth potential filter by sectors that match your differentiated capabilities.
• Size Manageable?
• Alignment - do not stray too far from what you know
• Culture. Business rather than social culture. Management structure.  Use Social Platforms such as Glassdoor

What You Need to Do - The How

• Know your company
• Why do you want to acquire
• One off? Bolt on? Roll up?
• Detailed research is needed? Who will do it?
• Set parameters
• Prepare a potential target list and filter
• Assess your capabilities

You can contact me via:
Jeremy@business-in-asia.org

My websites include:
https://business-in-asia.org/

https://thedentistscfo.com/

My LinkedIn URL
https://www.linkedin.com/in/jeremy-gray1

To book some time on my calendar:
https://calendly.com/3-continents-consulting

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