Monday, September 10, 2012

14 Keys to Acquisition Success

The following points are some of the things important to remember in M&A.  Joe and I will be expanding our analysis of each of these points in the coming weeks.  Obviously, the list can also be considerably longer.  What is missing?  Send us your favorites as well as examples of the items listed.

1.     Sometimes the best deals are those you don’t attempt or complete.

2.     Any deal is a bad deal at some price; not every deal is a good deal at some price.

3.     Negotiate the deal on all aspects (price, form of payment, contingencies, etc.)

4.     Listen – and remember what you say may not be what is heard.  Also, what is said may not be what is meant!

5.     Beware of unrealistic projections.  Understand the source of synergies.  Why are these synergies available to you and not other buyers?

6.     Beware the winners curse – you win the auction not because you are the smartest, but because – you paid the highest price.

7.     Most deals fail to reach their full potential because of issues in integration. Don’t underestimate the costs and problems of integration.

8.     In mergers, 2+2 can equal 5, (3 is also a distinct possibility)!

9.     Think strategically, but understand that your competition is doing the same.

10. Value does not equal price.   As our friend Bob Bruner has noted, Price is what you pay, Value is what you estimate.
11. Establish a walk-away price up-front.  Don't be afraid to walk away.  (See point 1!)
12. Do not over borrow.
13. Assess risk not just reward.
14. Due diligence is key, or as President Reagan used to say-trust, but verify.

·      ????  What is missing?  Help add to the list.



  1. Don't let the accountants and lawyers convince you to do a deal if it doesn't feel right. They get paid whether you do a deal or not.