Let’s say you have identified a specific company as a prospective acquisition. To get to know that company, you must do primary research, not just secondary (online or library) research. This involves getting on the phone and talking to people who deal with the company on a regular basis, and eventually to the principals themselves. …
Tag: David Braun
Developing Prospect Criteria
As I’ve stressed in an earlier post, I recommend including not-for-sale companies in your acquisition search. This will significantly expand your universe of potential acquisition prospects. However, with such a large pool, you must develop criteria through which to filter the prospects in order to narrow your options. The first step in establishing your criteria for prospects …
Every Company is for Sale…for the Right Equation
When a company is ‘‘not for sale,’’ that simply means it isn’t actively seeking a buyer. If through your search and screening process you discover a company that could be the right fit for your acquisition criteria, then it should be pursued, even if it is ostensibly not for sale. The central point here is that every …
Markets First
I always emphasize to my clients the critical value of painstaking market research and selection before considering individual prospects. Simply by conducting thorough research, you immediately separate yourself from the majority of company buyers and place yourself at an important competitive advantage. Choosing Market Criteria Choosing the correct market criteria may be tricky. Here are …
Growth Pathway # 5: Pursue External Growth
The fifth and final pathway to growth is external growth. Here, expansion is achieved by engaging with entities outside your company. There are many forms of engagement, of which acquisition is but one. External growth can be one of the most exciting paths to growth and in many cases, it should top your list of …
The Power of Minority Interest: Microsoft’s Interest in Dell
Although I deal primarily with mergers and acquisitions, acquisition is simply one pathway to external growth and should be considered in a broader context. One of the pathways to external growth to consider is minority interest ownership. Microsoft’s proposed buyout of Dell demonstrates many of the benefits of minority interest ownership, a surprisingly neglected tactic. …
Prepare to Buy: Planning A New Acquisition
The decision to make an acquisition is no small step. While there is risk inherent in any acquisition, the downsides can pale next to the potentially enormous rewards. In my post on the Association for Corporate Growth blog, I outline how to plan a new acquisition so you can minimize the risk and reap the …
Growth Pathway # 4: Do Nothing
Of course, doing nothing is rarely if ever a pathway to growth. However, it is a choice that companies actually make every day. ‘‘Choice’’ may be an overstatement. Few executives or board members sit down, open their flipcharts, and plan a careful do-nothing strategy. They drift into it by default. When things seem to be …
Growth Pathway # 3: Be the Low Cost Provider
Sometimes organic growth can be achieved by dramatically cutting costs. I call this the “jellyfish strategy” : you go up when the tide is up and out when the tide goes out. There may not be many natural predators, so you will survive, but this approach is unlikely to drive long-term expansion. Note, that being …
Growth Pathway # 2: Exit the Market
If your company’s organic growth has hit a plateau or is in decline, leaving the current market is an option that should be seriously considered before you embark on any other growth solutions. As I previously mentioned, growth does not necessarily mean getting bigger. Sometimes the best pathway to growth is to get out of …
