24 / 10 / 2019

Buying out a company- how to find a company to acquire?

Finding a company to buyout and taking over is a long and tedious process. The process should be preceded with a careful analysis, thorough survey of the market, and identifying individual needs. Usually, businessmen and businesswomen decide to buyout a company when they are planning on widening their own market offering, increasing already possessed competencies within their own organizations, or expanding their organization. The desired effect of growth is usually difficult to achieve due to market saturation or is led by making wise investment decisions when faced with budget surpluses.  

The motivation behind the investment varies but identifying that motivation will help make further decisions more effective. The simple decision to buyout a company is not enough.

The next important step is to decide what are the characteristics of the sought out company for sale? What we consider a business for sale can take a few forms:

  1. Selling the whole or part of the business
  2. Selling the assets of the business
  3. Sell part of all shares in the business

 

If the motivation and specifics of the acquisition, or buyout, have already been decided upon, the only thing left is to make a list of the goals which the buyout should help meet. At the beginning, the list may be extensive. Creating such a list is based upon surveys and analysis of the market, along with searching through available classifieds. It is also worth deciding upon what type of company we would like to acquire, whether that may be a company that is struggling financially, a large company, or a promising startup.

If you already possess the appropriate organizational list it is time to continue on to verifying if the owner of the company is actually interested in the sale of the business and/or is ready to finalize such a transaction. It is important to remember to mention the benefits of conducting such a sale to the owner at this stage. 

After narrowing down the list of companies or projects that we are interested in acquiring, it is recommended that an analysis be conducted. An audit should take into consideration the legal, economic and technical standing of the prospect company. An audit will help identify some of the risks that we are about to undertake and, ultimately, allow us to propose an attractive proposal. 

The last stage should be conducting negotiations. Of course, it is recommended that a legal advisor be involved in the process. The valuable legal advice that can be obtained will allow for a win-win outcome.

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