Dr. Tom McKaskill
Breakthrough Publications, 2010, 284 pages (1.6MB)
Most acquisitions fail to achieve their objectives or to return positive shareholder value. Companies enter into acquisition discussions with little preparation for evaluating the potential acquisition or for managing the newly acquired business after the deal is done. Where there are major cultural differences, these are not adequately recognised during the initial discussions with the vendor and are often badly handled during the integration activity. However, with advance preparation these problems can be overcome. Successful acquirers carefully screen potential acquisitions to ensure that they fit with long term company strategy, proper due diligence is undertaken to assess their worth and adequate attention is given to the task of integration. Entrepreneurs intent on growing their businesses through acquisitions need to develop capability and capacity in acquisitions management in order to successfully harvest the benefits of buying businesses. This book sets out to show entrepreneurs how they can become acquisition ready:
- Common reasons for acquisition failure and how to avoid them
- The various types of acquisitions and how they should be evaluated
- The difference between financial acquisitions and strategic acquisitions
- Cultural fit and how to assess and manage it
- How to mange international acquisitions
- How intervention and integration should be managed
- The various sources of finance for acquisitions
- How to structure the acquisition deal
- The role of professional advisors
- Guidelines for managing autonomous acquisitions
Part A: Acquisition Strategies
- Building capacity and capability
- Failure rates are high
- Types of acquisitions
- Developing an acquisition strategy
- Evaluating financial acquisitions
- Evaluation strategic acquisitions
- Cultural fit
- Managing intervention and integration
- Financing the acquisition
- Finalising the deal
- International acquisitions
- Using advisors and professional services firms
- Meeting the challenge
A. Identifying cultural and environmental differences
B. Identifying differences in ethical values
Part C: Acquisition Ready indices
A. Operations Management
B. Acquisitions Strategy
"Preparing the company to undertake acquisitions requires the company to build a capability for acquisitions. This means educating the senior executive team, identifying the role of acquisitions in the long term strategy of the company, engaging the right professionals and building capacity to take on the disruptive process of identifying, evaluating and integrating a new business. At the same time that the company is engaging with possible acquisitions it needs to have developed a source of funding for the acquisition, put in place a succession plan for their own executives who will be involved in the acquisition process and developed a plan to manage the changes in the acquired business and their own as a result of the assets and capabilities acquired. Acquisitions are major investments with high risk potential which are absorbed over a very short period and thus can create major disruptions to the overall business. Unless planned and managed carefully, the result is likely to be disastrous for both the acquired business as well as the buyer".