Most acquisitions fail to achieve their objectives or to return positive shareholder value. Companies enter into acquisition discussions with little preparation for evaluating the potential acquisition or for managing the newly acquired business after the deal is done. Where there are major cultural differences, these are not adequately recognised during the initial discussions with the vendor and are often badly handled during the integration activity. However, with advance preparation these problems can be overcome. Successful acquirers carefully screen potential acquisitions to ensure that they fit with long term company strategy, proper due diligence is undertaken to assess their worth and adequate attention is given to the task of integration.
Entrepreneurs intent on growing their businesses through acquisitions need to develop capability and capacity in acquisitions management in order to successfully harvest the benefits of buying businesses.
This book sets out to show entrepreneurs how they can become acquisition ready:
• Common reasons for acquisition failure and how to avoid them
• The various types of acquisitions and how they should be evaluated
• The difference between financial acquisitions and strategic acquisitions
• Cultural fit and how to assess and manage it
• How to mange international acquisitions
• How intervention and integration should be managed
• The various sources of finance for acquisitions
• How to structure the acquisition deal
• The role of professional advisors
• Guidelines for managing autonomous acquisitions
Ultimate Acquisitions sets out a systematic and pragmatic process for identifying, evaluating, valuing and integrating financial and strategic acquisitions. Dr. McKaskill draws extensively on his own experience as a CPA, entrepreneur and academic as well as his personal experience with acquisitions and the sale of his businesses. His approach brings a systematic and comprehensive approach to growing the business through acquisitions. Tom combines his personal and professional knowledge with advice from successful entrepreneurs, business advisors and venture capitalist to create his unique Acquisition Strategy Index and the Operational Management Index.
"Successful acquirers know that there is a lot more to achieving a positive return on an acquisition investment than buying cheap or opportunistically. An acquisition needs to fit into a long term strategy of the company and must be evaluated thoroughly to ensure that the company has the capability and capacity to exploit its potential. At the heart of the evaluation is the problem of cultural fit. Successful acquirers know that the existing culture of the newly acquired business is the best predictor of ultimate successful integration and thus turn away from acquisitions which will be difficult to absorb. The risks inherent in any acquisition are substantially reduced by proper planning and due diligence and by having the right people to manage the acquired business."
In 13 crisp chapters, Dr. McKaskill sets out his guide for Entrepreneurs.
Part A: Acquisition Strategies
1. Building capacity and capability
2. Failure rates are high
3. Types of acquisitions
4. Developing an acquisition strategy
5. Evaluating financial acquisitions
6. Evaluation strategic acquisitions
7. Cultural fit
8. Managing intervention and integration
9. Financing the acquisition
10. Finalising the deal
11. International acquisitions
12. Using advisors and professional services firms
13. Meeting the challenge
Part B: Cultural and Ethical Assessment
A. Identifying cultural and environmental differences
B. Identifying differences in ethical values
Part C: Acquisition Ready indices
A. Operations Management
B. Acquisitions Strategy
"Preparing the company to undertake acquisitions requires the company to build a capability for acquisitions. This means educating the senior executive team, identifying the role of acquisitions in the long term strategy of the company, engaging the right professionals and building capacity to take on the disruptive process of identifying, evaluating and integrating a new business.
At the same time that the company is engaging with possible acquisitions it needs to have developed a source of funding for the acquisition, put in place a succession plan for their own executives who will be involved in the acquisition process and developed a plan to manage the changes in the acquired business and their own as a result of the assets and capabilities acquired. Acquisitions are major investments with high risk potential which are absorbed over a very short period and thus can create major disruptions to the overall business. Unless planned and managed carefully, the result is likely to be disastrous for both the acquired business as well as the buyer".
"The ability to successfully source and execute Acquisitions will become a key capability of growth orientated companies in future. Tom's book covers all of the major issues and provides a very practical methodology that will be extremely helpful for businesses about to undertake an Acquisition"
"Young and growing industries sooner or later consolidate or merge - and that means you will either sell your business to an acquirer or become an acquirer yourself. This book will help you with both of those challenges, and in particular show you how to optimise your result - whichever option you choose. A sound acquisition."
Adolph M Hanich,
"The art of making the right purchase decision is often overlooked and frequently buried in just a set of formulas to calculate purchase prices and related issues. This book moves beyond that - and it will give entrepreneurs some very useful, original insights into how to optimize the acquisition process."
Dr Michael Schaper,
Former Head, School of Business,