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Key Factors For A Successful Closing

Experienced intermediaries list several key factors from the buyer’s side, most of which are necessary for a successful closing.

• Sufficient financial resources to complete the deal as specified.

• Sufficient staff to run the business and to continue working on an acquisition at the same time.

• Realistic approach to the type, size, and geographic location of target companies.

• The willingness to pay for acquisitions and, if necessary, to pay all-cash.

• The willingness to go six to twelve months in the search for acquisition targets and to pay monthly retainers to the intermediary firm.

• Confirmation in writing by the Board of Directors or the company owner(s) of their commitment to the search for an acquisition.

• The existence of a company representative, preferably the CEO, CFO or the Director of Development, who is reachable on a daily basis.

• Complete access to company management who may be helpful in the search process.

• The willingness to not give up on a deal even if it is necessary to walk away from the table. The buyer or his intermediary should contact the seller every few months – surprisingly sellers can become more reasonable over time.

The real keys to acquisitions are to maximize deal flow of target companies, qualify the seller by discussing price issues early-on, retain professional intermediaries, make sure everyone understands the valuation parameters, and stay in touch with prospective sellers even if at first negotiations fall apart.