Mergers & Acquisitions For Dummies

Chapter 2

Getting Ready to Buy or Sell a Company

IN THIS CHAPTER

Knowing why companies often sell or buy other companies

Preparing your company to engage in M&A

On Seller’s side, the conversation begins with any one of numerous comments: “I think it’s time to retire,” or “I’ve taken this company as far as I can take it,” or maybe even, “This company is about to crater; I want to get out.”

On Buyer’s side, the conversation also begins with any one of numerous comments, but comments of a slightly different variety: “Organic growth isn’t enough. We need to consider growth through acquisitions,” or “I think buying that product line might be easier and less expensive than building one from scratch,” or maybe even, “Those guys are killing us; let’s see if we can buy them out.”

These conversations are often held with advisors — lawyers, accountants, wealth managers — or other executives. Most often, a set of questions follows: “How do we do this?”, “What’s the first step?”, and finally, “Do you know anyone who can help us?”

The decision to sell a business or to make an acquisition is often confusing, frustrating, time consuming, and expensive. But never fear; in this chapter, I break down the early considerations for selling or buying a company so that they feel less intimidating.