An acquisition deal is a business transaction in which a company that already owns a product or service purchases a company and takes over its operations. While some companies have internal corporate development teams to look for potential opportunities, most acquisitions are made by larger businesses with existing revenue streams seeking growth opportunities through new product lines or expansion into new geographic markets. Acquisitions are typically more complex than startup ventures and can involve multiple layers of stakeholders including decision-makers, lawyers, accountants, and owners.
A successful acquisition can lead to a boost in revenues and profits and can allow the acquiring company to become a leader in its industry. However, a bad acquisition can have the opposite effect and may cost a lot of money to get back on track.
The first step in structuring an acquisition deal is preparing for due diligence. This involves digging into the target company’s financial records, contracts and legal matters to find out how they operate their business. This can also reveal any hidden liabilities and pitfalls that may impact the transaction.
Once the due diligence process is completed, the next step is the negotiation phase. This is the most crucial part of the acquisition process and should be done with an experienced attorney to ensure that you get a fair deal.