Do you ever think about taking over a company or maybe merging your company with another one? Many entrepreneurs find this idea exciting. We all know the stories that, in reality, things are going a little bit differently than expected. We will take a closer look at this process in our blog series called ‘merger and acquisition’.
In our ‘Mergers and Acquisitions’ trilogy, we discuss the steps within the merger and acquisition process. We have subdivided these steps into finding the right companies, the transaction and the integration process. In the blog “Merger and acquisition I – The search” we will go deeper into searching (or finding) the right company.
The right company
In our blog ‘How do you find the right company to take over?’ we described the first steps of finding the right company. It is important to have a clear picture of where you want to go as a company. In practice, the chance of success increases when you start with what you can add to the other party. In many cases, companies only look at what they can gain from the other party. Unfortunately, this often leads to failure. It is therefore important to establish a clear business profile and to identify the potential risks.
Have you completed the first steps? Then the real search begins. But how do you do this? You can already make a nice selection based on the company profile you established. However, only a company profile is not enough to find that perfect match. In our blog ‘6 tips for a company takeover’ we explain that it is also important to get a good feeling about the company you plan on taking over. Consider, for example, the corporate culture and which people have important positions within the company.
Many companies are offered for sale. This seems very interesting, because there is a lot of choice. But sitting back and waiting for companies to come to you may not be the best strategy. The competition is not standing still and may be in the market actively looking for companies to take over. There is a good chance that the companies with the greatest potential have already been taken off the market. It is therefore wise to take a bold step and examine the market yourself.
A study by the international management consulting firm McKinsey & Company (which can be read here) has shown that companies that are actively looking for companies to take over perform better than the competition. Especially when there are several smaller acquisitions, the economic result increases significantly. Companies applying a structured acquisition strategy achieve considerably better results. The more often a takeover takes place, the better you get at it. As a result, both the efficiency and effectiveness of acquisitions will improve significantly over time.
A professional party with experience in this area can assist with both sales or purchases. Are you looking for a company to take over? Or maybe you are about to sell your business? Feel free to contact us to see if we can do anything for you. Our contact information can be found here.