Key Takeaway: Mergers and acquistions are hard enough without these surprisingly common reasons they can fail. Learn how to avoid these mistakes and strengthen your M&A strategy.
Two More Takeaways:
- 70% to 90% of acquisitions fail to deliver the value the buyer anticipated.
- It is nearly impossible to build a world-class company on organic growth alone.
The Four Failure Modes:
- Cost of the acquisition greater than the benefit. Look beyond valuation at what you need to give up to complete the deal, execute the transition, etc..
- Not understanding what you bring to the deal. Successful acquirers focus on the internal capabilities they can leverage to transform the target company.
- Inexperienced in M&A. Studies show that more frequent acquirers have more success than less frequent acquirers.
- Lack of a Defined Process. Acquisitions fail when a company does not have a defined M&A process.
Conclusion
Your best bet is to seek outside assistance during your M&A process (someone who perhaps has done several, or is a repeat advisor or buyer for this process). However, if you are performing your own acquisition, make sure you are avoiding these four common pitfalls and planning for the future.
Full Article LINKFor additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at Eric@EdisonAvenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com. To search for Florida Businesses for Sale: CLICK HERE
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