The key to a successful acquisition is putting significant resource into both planning the acquisition and integrating the new business once it is acquired. Otherwise it faces the risk of being one of the 50% of all acquisitions that either fail or do not provide the benefits the acquirer had planned. Cole Associates approach is to invest time with the client in the planning stage, in the execution of the transaction and, if requested to do so, in the integration stage.
Our role is as follows.
If the target company has not yet been identified:
- Helping the client to define the acquisition criteria and to establish strategic and operational objectives.
- Extensive research, working with the client to utilise their knowledge of their industry, to identify a list of potential targets that fit the acquisition criteria and obtaining information on each of them.
- Approaching the owners of the target companies on behalf of the client, to determine the owners' appetite for disclosing information and entering into discussions.
- Evaluating information provided by the owners and assessing the relative merits of different target companies.
When a 'preferred target' has been identified, Cole Associates' role comprises:
- Valuation and feasibility review: To determine whether the vendor's price expectations are sensible, and if there is a realistic prospect for funding the acquisition if the client does not already have access to funds.
If the client does not already have access to funds:
- Guiding the client in the preparation of their Business Plan and financial projections, setting out their acquisition objectives and strategy for the combined business, post-acquisition.
- Advice on the most appropriate funding structure (i.e. the mix of debt, venture capital, finance leases, grants etc).
- Introducing the funding opportunity to a selection of appropriate funders Assisting the client in presenting their proposals to the funders.
- Negotiating with the funders, to obtain the funds on the most advantageous terms possible for the client.
- Liaising with the preferred funders throughout the remaining stages of the investment/lending process, including due diligence and legal agreements, through to credit approval.
Negotiating with the vendor:
- Advice on pricing and tactics.
- Preparing indicative offer letters.
- Negotiating on behalf of the client, to acquire the business on the best possible terms.
- Liaising with the lawyers to agree the legal documentation.
- Project managing the transaction: Coordinating the activities of all the parties and closely managing the critical path, to facilitate a prompt completion.
- Working with the client, to provide ongoing advice on the integration of the acquired business within the client's existing business, to ensure the planned benefits accrue.