Generating a list of companies to acquire is easy. Simply call up an investment banker or visit a broker website like BizBuySell and you’ll find dozens of for-sale companies. The problem with this approach is although these owners are willing to sell, many of these companies may not be what you are looking for in an acquisition candidate.
Finding the right acquisition candidates for your company begins with first developing a picture of what your ideal acquisition prospect looks like before you begin combing through listings. Paint a picture of what this company looks like including factors such as size, financials, geography/location, technology, product and customer mix. During this stage, be as specific as possible. For example, you may wish to acquire a plastics manufacturer located in the United States with at least $5 million in revenue, customers in Europe and Asia and that owns the IP to its formulas.
Initially, this prospect criteria will be your guide to ensure the candidates you do find are aligned with your overall acquisition strategy and growth plans. As you identify and evaluate candidates, you can refine your acquisition criteria. In addition to evaluating for-sale companies, you should evaluate not-for-sale companies identified from market research, trade shows, associations and conferences, your internal team, as well as other avenues including internet searches or databases using NAICS code or other information.
While no company is perfect, benchmarking potential candidates against your ideal prospect criteria will increase your chances for finding the right company to buy.
Learn more about finding acquisition prospects in our upcoming webinar “Building a Robust Pipeline of Acquisition Prospects” on March 21.
Date: Thursday, March 21, 2019
Time: 1:00 PM – 2:00 PM EDT
CPE credit is available