Acquiring a business can provide a quick and cost-effective and fast way to grow your organisation or make strategic gains, but it also represents one of the biggest risk factors a business can face both in terms of the acquisition and the integration. Such a purchase can facilitate rapid entry into a new market or region and bring key personnel, brand equity, new technology or new customers.
ibv understands the challenges that an acquisition brings and the post deal integration issues. Having been involved in many acquisitions as advisors and business owners, we really do bring a different perspective to the challenges faced. Our experience allows us to bring a pro-active approach as we know the problems that may arise further down the line in negotiations, and we can ensure that the major deal breakers can be identified early on in the process to minimise your costs.
We also understand the major role HR plays in the success of the ultimate merger or acquisition, in what can be a difficult situation, for example: development and implementation of the communication strategy; retention of key staff; separation of redundant staff; TUPE transfers; integration of the HR policies, procedures and systems.
The key benefits an acquisition can bring for your business include:
- Obtaining quality staff or additional skills, knowledge of your industry or sector and other business intelligence. For instance, a business with good management and process systems will be useful to a buyer who wants to improve their own. Ideally, the business you choose should have systems that complement your own and that will adapt to running a larger business.
- Accessing funds or valuable assets for new development. Better production or distribution facilities are often less expensive to buy than to build. Look for target businesses that are only marginally profitable and have large unused capacity which can be bought at a small premium to net asset value.
- Accessing a wider customer base and increasing your market share. Your target business may have distribution channels and systems you can use for your own offers.
- Diversification of the products, services and long-term prospects of your business. A target business may be able to offer you products or services which you can sell through your own distribution channels.
- Reducing your costs and overheads through shared marketing budgets, increased purchasing power and lower costs.
- Reducing competition. Buying up new intellectual property, products or services may be cheaper than developing these yourself.
- Businesses in the same sector or location can combine resources to reduce costs, eliminate duplicated facilities or departments and increase revenue.