3. Acquisition Process

Nota:

• - Quantifiable and businessplan supportive

1. Search
   1. Screen
      1. First contact
         1. Negotiation
            1. Integration plan
               1. Closing
                  1. Integration
                     1. Evaluation
                        1. Differ from expectation
                           1. Corrective actions
                              1. Learn from mistakes
                                 1. Steady becnhmark
                     2. Communication plans

                        Nota:

                        • - Employees - Costumers - Suppliers - Investors - Communities
                        1. Employee retention
                           1. Cash flow issues
                              1. Culutral issues

                                 Nota:

                                 • Size Industry Geography
                                 1. Shared goals, shared standards, shared services
                  2. Consent

                     Nota:

                     • From all parties
                     1. Definite agreement
                        1. Price
                           1. Allocation

                              Nota:

                              • Tangible assets
                              1. Assumption of liabilites
                                 1. Peps and warranties
                                    1. Covenants
                                       1. Closing conditions
                                          1. Indemnification
                                             1. How employe will be paid
               2. Determine events to realise synergies
                  1. Rapid integration reach synergies sooner
                     1. Minimize emplyee turnover and customer reduction
                        1. Emperical findings: Lose 5 -10 % of costumers
               3. Integrating mechanism
                  1. Team work
                  2. Parties to alliance in resource
                     1. Consensus decision making
               4. Include management
            2. Final pruch. price
               1. Refining valuation
                  1. Deal structuring
                     1. Due dilligence
                        1. Financing plan
                           1. Negotiations on covenants, and how borrowd funds are used
                              1. Obtaining bridge financing
                                 1. Conducting road show
                        2. Validate valuation assumption,
                           1. Identify value creation/destroyers
                        3. Buyer, seller, lenders
         2. Objective

            Nota:

            • - Relationship and trust if time allows
            1. Direct intermediate
               1. Strategy

                  Nota:

                  • - Size - Public or private - Time
                  1. Preliminary legal document

                     Nota:

                     • - Confidentiality: Mutual Binding - Term sheet: Range price, no-shop privision (seller dont go to other parties), - LOI: Major terms and conditions, Protective provisions,        -- Not always wanted        -- May delay the process
      2. Increase selection criteria
         1. Market share
            1. Profitability
               1. Degree of leverage
   2. Primary selection criteria
      1. Strategy
2. Timetable
   1. Resource capacity
      1. Management preference
         1. Search plan
            1. Negotiation strategy
               1. Initial offer
                  1. Financing plan
                     1. Integration

Nota:

• - Five forces: Costumers, suppleirs, current competors, potential competitors, and product substitutes.

1. Internal

   Nota:

   • - Compared with other firms
   1. Vision
      1. Objectives
         1. Business strategy

            Nota:

            • Price cost leadership Product differentiation Focus or niche Hybrid
            1. Implmentation Strategy

               Nota:

               • Linking to acquisition plan