Acquisition Guideline Considerations
CHEMARK has
developed a set
of considerations
designed to
maximize a
successful
acquistion.
by Phil Phillips, PhD
Contributing Editor
phillips@chemarkconsulting.net
When considering an acquisition (merger and joint venture as well) we all know there are many pitfalls associated with opportunities in the process. We all know to avoid as many of these
as possible, detailed plan and a set of objectives related questions must be considered.
CHEMARK has developed such a set of considerations designed to maximize a successful
acquisition.
Specific issues, which MUST be addressed
during the acquisition investigatory stages
include:
• Development and agreement of appro-
priate screening and selection criteria for the
target companies and business management
(champions).
Approach and Methodology:
We see a three phase methodology:
• Phase 1 Building a foundation through
establishment of clear selection criteria, struc-
tural market assessment and identification of
possible opportunities.
Phase 1:
Foundation Building
All key decision-makers (investors included),
need to fully understand “What will the success look like?” Goals and objectives for the
concept company will be translated into a set
of “screening criteria” to be used in identifying
and assessing possible acquisition candidates.
Possible dimensions for consideration include
potential for market growth, organizational
capabilities and capacity for innovation, competitive advantage and opportunities for value
generation. A detailed list of key perspectives
to consider for each of these dimensions is
shown below.
With these selected criteria in hand, a structural analysis of the markets aimed at identifying potential opportunity targets, is launched.
It’s important to quickly and thoroughly establish the size, growth and trends of the market
segments targeted. Interviews with material
suppliers, formulators, end-users, trade associations and other industry participants provide
the bulk of the needed information. Depending
on the complexity of the acquisition, analysis
could consider 20-70 interviews market segments will be analyzed to provide detail on consumption, relative segment profitability, growth
rates, market dynamics, participants, positioning, unmet needs, etc. This analysis will provide
the foundation identification and assessment
of potentially attractive target segments that
match the developed criteria.
At the conclusion of Phase 1, it’s important
to stop and thoroughly consider the quality
of the results. The overview of the structural
