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Acquisitions. You hear the word often these days.
Acquisitions are driving industry consolidation in many business
sectors. Acquisitions are being used to accelerate the growth of
companies and to provide sustainable competitive positioning. In
fact, companies are often forced into considering growth by acquisition
because of what their competitors are doing.
Does acquiring a company make strategic sense for
your business? The media shine their spotlight on the advantages
of this current merger and acquisition frenzy. However, many more
acquisitions fail than succeed each year, or at the very least reduce
shareholder value in the acquiring company. Companies overpay, improperly
finance or do not properly gauge the managerial or human resource
capabilities of the target company. Not much is mentioned about
these risks. They are considerable and potentially fatal to any
business whose owners underestimate them.
Successful acquisitions require expert know-how to
originate and evaluate, to complete business and financial due diligence.
Acquisitions often demand expert guidance with regard to financial
structuring and tax planning. Most importantly, since the culture
within companies, even those in the same industry, is rarely the
same, acquisitions require thoughtfully developed and carefully
implemented post-acquisition integration plans.
For more information on acquiring companies click
here.
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