Merger & Acquisition - Basic Steps & Framework
- Feb 24, 2018
- 1 min read
1. Identify growth market and services.
A. 5 Forces Analysis
2. Define Corporate acquisition strategy and identify potential M&A candidates.
Define initial size of acquiring company (Revenue and Assets).
Decide geographical area.
Understand solution portfolio
Get the list of all the target companies from below sources.
Contact Investment Banks
From contacts
Information from stock exchange, Bloomberg, CapitalIQ.
3. Screening with primary criteria.
Filter based on Revenue and Assets
Filter based on defined solution portfolio
Differentiator solution offering
Analyst rating.
4. Assess strategic fit and financial position of both acquirer and acquiring company using below.
VRIN/VRIO,
7S.
5. Comparison of acquirer and acquiring company for assessing strategic fit.
6. Assess synergy potential and value creation.
Financial analysis of last 3 years statements of acquiring company.
Net value increase.
Financial ratio: Profitability ratio, Efficiency ratio, Liquidity ratio, Operating Ratio.
7. Make go no go decision.
8. Conduct valuation.
9. Perform due diligence and negotiation.
Comments