Acquiring the right company is the key to acquisition success. Your target should fit into your company’s overall strategic vision and add value to your business.
To determine what this company looks like and to find it, develop prospect criteria. Keeping in mind your business strategy, sit down with your acquisition team and write your description of the perfect acquisition target company. Use criteria and metrics to describe the ideal candidate. Try to limit your criteria to no more than six, focusing on strategic aspects.
For example, your criteria could include “strong management experience,” with “executive team in place for at least five years” as your metric. It’s very important to include objective and measurable metrics because these criteria will be used for evaluating actual companies.
An objective system lets you evaluate and prioritize your prospects. While reality may never match your ideal, this exercise will yield a very effective list of criteria for your search.
*This post was adapted from David Braun’s Successful Acquisitions, available at Amazon.com