Key Factors on the Acquirer’s Side

Just as business owners have to consider several key factors before jumping into the sale, the acquirers must also. The deal is not simply straightforward from whichever side you are looking at and requires preparation. In this article, we will highlight a number of important factors that a buyer/acquirer has to keep in mind before going ahead with any deal.

  • Sufficient financial resources to acquire the business
  • Have capable staff at disposal who will be able to operate the business as usual while the business is being acquired
  • A rational approach to the type, size and geographic location of target companies
  • The willingness to “pay-up” for acquisitions such as 6x EBITDA and, if necessary, the willingness to pay 100% cash, whether the sale is one of assets or a stock transaction
  • Willingness to carry on searching for the right deal for a period of up to 12 months provided the search yields satisfactory deal flow
  • A confirmation by the board of directors of their commitment to complete a deal
  • Free access to a reference person on the acquiree’s side, preferably the CEO, CFO, or Director of Development
  • Complete access to sales manager and other key personnel by the business broker (or some other third party professional) to discuss relevant matters and suggestions of target companies