Growing inorganically: the secret to a successful M&A valuation
09/05/2020
Growing inorganically

Is inorganic growth your strategic choice? Have you acquired a company, or are you planning to do so? As I wrote in a previous article, it is essential to always check the strategy fit from different angles. Also, it is usually advisable to employ external expertise when you decide to make multiple acquisitions. If it is your company’s first acquisition, it is critical to rely on outside professionals.

Financial advisors add value for their clients by collecting valuable information on the target company and the related industry. If your advisors have worked as leaders in that specific industry, their knowledge they have is usually very in-depth. In that case, they can also evaluate the cost of integration. This is where the acquisition will succeed or fail.

Benefits of working with an expert

There are some significant benefits; you will get from outside experts even before the integration phase:

  • Your strategy will be evaluated against your acquisition criteria.
  • An expert knows the acquisition process and manage it on your behalf.
  • As advisors can reuse data on a target (industry) obtained in previous deals, they often hold unique information.
  • Experts help your company optimize the best deal structure.
  • An expert can help you with funding options.
  • Advisors help you identify the best targets.
  • An expert will give you a realistic view of the valuations of targeted companies.
  • Advisors are neutral and constructive when negotiating with owners who do not want to sell.
  • The advisor’s primary goal is to close the transaction if it makes sense to your company.

If you want to think an advisor could help your business acquire more companies or its first company, we are ready to discuss your plans and strategy.

Jarmo Kuusivuori

Views on acquisitions

Why do companies make acquisitions?

Why do companies make acquisitions?

According to my experience, there is only one formula for selecting acquisition targets successfully. It is the business strategy: each merger or acquisition must have its...

Read more
Share This