Blog – January 2020

Is 2020 the Year for Your First Acquisition?

When we are initially asked to look at acquisitions for a client, we spend the first few hours exploring why they shouldn’t! This may well employ a version of the ‘5 whys’ – an established methodology to get to root cause of a problem. In this instance, our questioning will challenge the underlying rationale and test the alignment with desired objectives and outcomes. If you can survive this scrutiny then you probably have an idea that really is worth exploring!

That may sound a little negative for an M&A practitioner but it’s far better to find out at an early stage if the idea has legs and then proceed with gusto. The truth is the Prism team is enthusiastic about acquisitions and with a clear rationale and defined objectives there is a more realistic chance of success.

What might affect acquisition success? Well it is certainly a truth that the bigger the bargain you are looking for, the harder it will be to find. Instead spend your time clarifying the brief and most importantly establishing the potential synergies. The greater the synergies, the more the business is worth to you. This understanding may give you an advantage over other bidders. Ever wonder why some businesses are prepared to pay more than others and yet still maintain excellent results? It is more important to find the right business than get a bargain for the wrong one. At the time of the January sales that is an idea worth keeping in mind!