|cost position, brand power, consumer loyalty, real asset advantage, or government protection. The best acquirers know their core strengths and target deals that enhance them.
What steps should you take to identify appropriate targets and define deals that make sense for your organization?
- Determine your basis of competition
- Rationalize the core, exiting businesses that don't reinforce it
- Identify potential targets
- Develop a sound investment thesis for each target
- Develop good relationships with your targets
- Focus on the right size deals and the right frequency; the best acquirers start with small deals and build up to larger ones as they develop their expertise
The message here: Do your homework, long before you approach acquisition candidates. Develop a sound investment thesis, based on a clear growth strategy and an understanding of your basis of competition. Then be prepared to act on that homework. Go after targets that you already know intimately. Go to the table frequently, but don't bite off more than you can chew.