{"id":6027,"date":"2023-10-30T19:23:04","date_gmt":"2023-10-30T19:23:04","guid":{"rendered":"https:\/\/fusacq.ca\/?p=6027"},"modified":"2023-12-05T21:02:13","modified_gmt":"2023-12-05T21:02:13","slug":"some-red-flags-during-an-acquisition","status":"publish","type":"post","link":"https:\/\/fusacq.ca\/en\/some-red-flags-during-an-acquisition\/","title":{"rendered":"Some Red Flags During an Acquisition"},"content":{"rendered":"

When the “why” isn’t aligned<\/strong><\/p>\n

When the primary motivation isn’t clear, it’s time to ask questions. We’ve seen personal objectives supplant corporate ones – not always a good indication if a family member wants to buy at any price for entertainment – so the analysis may not be impartial.<\/p>\n

When culture and values are not assessed.<\/strong><\/p>\n

You must look at the nature of the target company. It will have the values of the entrepreneurs in place – they have hired their teams, treat their suppliers in a certain way and have their own business model. Sometimes sellers don’t want to see certain buyers, while sometimes buyers should spend more time on something other than financial statements.\u00a0 <\/span>What’s the point of buying a company if staff turnover reaches double digits in the first year?<\/p>\n

Under-allocating resources to the process<\/strong><\/p>\n

Buying a company is an important decision, and the desire to save costs can have more unfortunate consequences down the road. We’ve seen buyers wanting to reduce accounting costs – well, they’ve been surprised with a limited view of the situation – we’ve seen inventories present, but with low turnover, expenses missing. Being supported by professionals who are not used to doing buy-sell can delay a transaction or increase its risk – we’ve seen demands for change in the middle of the transaction process. The same goes for the integration process and change management – often overlooked.<\/p>\n

Ambition… A major challenge<\/strong><\/p>\n

In market definitions, a “tuck in” is a company that represents 5-10% of the buyer’s volume – an easy acquisition. Next come acquisitions that aim to diversify, whether geographically, in terms of customer base, distribution network or sectors – normal sizes are 10-50% of the buyer’s volume. Where questions need to be asked, and where the risk increases considerably, is when the target represents more than 50% of the buyer; get organized! and if it’s the little fish that buys the big fish, good luck!<\/p>\n","protected":false},"excerpt":{"rendered":"

When the “why” isn’t aligned When the primary motivation isn’t clear, it’s time to ask questions. We’ve seen personal objectives supplant corporate ones – not always a good indication if a family member wants to buy at any price for entertainment – so the analysis may not be impartial. When culture and values are not […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[79,80],"tags":[],"class_list":["post-6027","post","type-post","status-publish","format-standard","hentry","category-blog","category-buying-an-enterprise"],"acf":[],"_links":{"self":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/comments?post=6027"}],"version-history":[{"count":1,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6027\/revisions"}],"predecessor-version":[{"id":6028,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/posts\/6027\/revisions\/6028"}],"wp:attachment":[{"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/media?parent=6027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/categories?post=6027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fusacq.ca\/en\/wp-json\/wp\/v2\/tags?post=6027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}