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Process Of Acquisition
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The process involved in business acquisitions
The first process is courting. Acquisition involves the goals of the business. One needs to know why a particular acquisition is important for the company. The ways in which the acquisitions will be beneficial to the company should be known by the buyer company. An agreement is made of the acquisition by the senior management and members in the board. The plans and strategies of corporate houses are best known by the board of directors and their nod in the acquisition will assure the effectiveness of the acquisition. One also needs to know the targets involved through the acquisition. An acquisition paper need to have the reason, valuation, source of fund required for transaction, the management team that will have the responsibility of the acquisition and the risks involved in the acquisition.
The merging of two compatible partners
Just as a successful marriage involves two compatible partners, business acquisition involves two right companies. The entire process of acquisition involves planning, valuation and execution. The common issue among two parties is that they do not agree with the price of acquisition. If there is a third party involved in the entire transaction episode the receipt is to be made clear among all the associated members. If there is a change in the purchase and sale agreement the update should be done by the finance section. Before starting and closing the entire transaction the Board of Directors is to be consulted without fail. After the approval of the Board of Directors in closing the transaction the entire process of purchase comes to an end.
How to make it work
Acquisitions often fail due to several changes in the market. One should not get disheartened if one of the transactions does not work out. One should focus on the mistakes and try to improve the deal the next time. A plan should be made having the details of the next step to be taken after the acquisition is implemented. This plan should be made before the end of the purchase. The probable results and the upcoming market structure are to be explained in the post acquisition plan. The comparison of the last few years and the growth and fall of results of several acquisitions are to be analyzed in the plan. After doing a proper research one can succeed in making business acquisitions.
The senior management and the CEO will play a crucial role in leading a business transaction. When one company has a strong and experienced team of professionals the deals will be smoother. The business deals work a lot on the basis of cordial relations among two companies. The deals need to be hinted and the most effective one should be grabbed.
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