you should implement a systematic search program
a disciplined approach to evaluating M&A opportunities is often recommended,
only an effective, systematic search program that uncovers opportunities make
possible the disciplined approach to succeed. For without discovering the
opportunities, no approach is given the chance to be applied. A
systematic search program is integral to the business of intermediaries like
Franklin Hamilton. Corporations with acquisition growth strategies would benefit greatly from adopting a similar
program or working with an intermediary who can demonstrate the effectiveness of
their search implementation.
systematic search program begins by setting realistic search criteria.
Often, the ideal corporate goals defined at the onset of an acquisition strategy
are overly ambitions. As reflected in the initial search criteria, they
are out-of-touch with the real world and therefore result in overlooking any
real opportunities that come along. Companies actively searching for over
a year without any real prospects may view this as an indication that
adjustments need to be made in their acquisition process, starting with
redefining the search criteria.
strategies often use a two step approach. The initial screening criteria
should be limited to a handful of attributes such as, industry, size and
price. If a company passes the initial criteria, the next step is to
examine the remaining attributes of the company. Keeping a strategic focus
and sticking to guidelines that define the type of fit the company is looking
for is critical during the second phase of the sifting process. Successful
acquirers are always on the lookout for deals. That means looking at
everything. Using a two step approach helps strike a balance between
spending too much time on unrealistic sellers and preventing the elimination of
the screening process is in order, the search program must be designed to make
possible a steady stream of deals to flow through the sifting process. An
important distinction of the marketplace makes this process more
promising. While it is true that good deals are hard to find, many
companies assume there are too few deals around let alone any good ones.
Intermediaries who proactively work an industry have evidence of quite the
opposite. There are too many deals but not enough good ones. The
latter more accurate depiction of the market suggests good deals can be found
but requires the hard work of examining many deals and demonstrates why a
systematic search program will eventually improve the odds in buyer's favor.
Hamilton can assist in providing clients with a systematic search program and
provide the steady stream of deal flows to cycle through your sifting