Most companies that are large
enough to acquire others have already learned that even though
it may appear expensive, it can often be easier to acquire than
to develop internally. The decision to acquire begins with an
analysis of your current IRR. If you find that you can earn 15%
on monies invested internally and you can acquire companies for
an ROI of 20%, you should be in growth through acquisition mode.
If you find yourself in that position, the next question is
direction. Do you want to simply buy competitors and increase
revenues, or are there synergistic products and markets that
could maximize your current marketing operation? Should you be
adding new geography or adding new markets in your current area?
Develop a strategy before you start the process of looking for
acquisitions.
There are many considerations to be noted in an acquisition
analysis, which differ for a corporate acquirer and a financial
buyer. The corporate buyer should consider amongst other
factors: synergy, management, products, markets, savings,
capacity, and price. Other considerations would be red flags that
could signal dangers below the surface such as inconsistent
financials, environmental issues, lawsuits, low margins,
competition, and poor documentation to list a few of the more
obvious.
CFA offers creative solutions for growth and diversification
financing. You may wonder about the appropriate financing
for your company and where to find investors or
lenders. You will need to consider the advantages and
disadvantages of equity and debt financing. Financing growth
means attracting investors and building financial partnerships
that ensure your long-term success. CFA can link you with
capital sources to help you stay competitive. We can provide you
with many options from senior debt facilities to growth capital
and mezzanine funding let us help you craft the right package
with the right team for your business. When your business needs
growth financing, timing is critical. CFA has the right contacts
to deliver the financing you need, when you need it.
Our experience tells us that for every one company that is for
sale there are four that would like to sell, but will not seek
out a buyer for fear of losing confidentiality or some perceived
negotiating advantage. Call your nearest CFA office so we may
help you with your growth strategy and your growth strategy
financing.
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