Strategies for Growth through Acquiring Business

At one point, almost every Antares operator will have an opportunity to acquire a competitor’s business. It is often possible to acquire business from a competitor at a lower cost than handling the business in-house. You will find that it is less expensive to grow by acquisition. There are some elements that are important in structuring an acquisition. Successful acquisitions usually proceed through seven defined stages:

Nondisclosure agreement Before divulging information to a potential buyer, most sellers will require the buyer to execute a nondisclosure agreement. This agreement requires the buyer to keep any information learned about the seller’s business confidential. This can be during the negotiation or even after the negotiation if the acquisition is not consummated.

Define the offering Is the seller offering to sell the capital stock in his corporation in a situation where the Antares buyer will be expected to take over all the corporation’s assets and liabilities? Even if the seller is offering to sell his operating assets to your Antares business, they should include the seller’s personal automobile or personal computer.

Financial and operating records The seller will normally be willing to produce financial and operating records to enable the Antares buyer to evaluate the worth of the offering. These should include current and prior financial statements. There should also be a complete list of all the operations, accounts and locations that gross more than 5 percent of annual sales.

Negotiation of value and terms As the Antares operator who wants to buy the business, you will need to carry out some analysis to value the business, in order to come up with a fair and viable offer for the business

The letter of intent When the parties have verbally agreed on value and terms, a letter of intent will be prepared and signed by the Antares buyer and the seller.

The due diligence In this part, the buyer is given the opportunity to examine the entire operation of the seller’s business, to assure himself that he will actually receive what the seller has represented.

The closing When all parties are satisfied, the closing agreements are drawn and the closing date is agreed upon. In addition to a purchase and sale agreement, the closing documents will include other documents.