Getting Acquired is Not Rocket Science – Four Tips to Land that Sweet Deal


Getting acquired by a global conglomerate sounds like a fairy tale. In Asia, some of the biggest acquisitions in past years are worth billions of dollars. Alibaba acquired video site Youku Tudou for US$4.2 billion; the takeover of Gmarket by eBay Korea is valued at US$1.2 billion.

Besides the possibility of a big payout, there are other reasons why acquisitions benefit businesses. Conglomerates can grow their market presence while the acquired companies can tap into the fresh influx of resources and operate at a greater capacity. By marrying their core competencies, both parties can stand to improve performances and decrease costs.

Wondering how you can get big names interested in your own business? Follow these golden tips on getting bought out.

A business that is needed

We are willing to pay good money for big-ticket items such as cars or washing machines as they are assets that remain useful for many years. An acquisition manager evaluates a company with this same mindset. A company whose offerings impact society in positive ways is highly valued. It is hence imperative to set up a business that fulfils a pressing need faced by a community, not just a want that will fizzle out within one or two years. This ensures that your business’s offering will stay in demand for many years to come.

The competitive edge that small and medium enterprises have is flexibility — the ability to chase emerging trends. Industry stalwarts, conversely, cannot simply trade in their core businesses. Use this to your advantage. Identify the unmet needs of your competitors’ consumers, and bring disruptive technologies to the table. With time, the acquisition deals will come knocking: The big guns will want a share of the pie, but not assume the risk of building from scratch an offering to rival yours.

Adoption the key to success

Disruptive technologies are sometimes thought of as new-fangled solutions with complicated features. They are not. The most popular innovations all have one thing in common: superb ease of use. Everyday consumers must be able to integrate your solution into their daily lives with no hiccup. This will ensure a high adoption rate, which is a criterion that big companies look for when assessing a business’s offering.

The appeal of a well-structured company

Put yourself in the shoes of an acquisition manager: Would you consider buying a company whose financial health is in the red? Or a notorious company that has glaring lapses in its protocols? Remember: Acquisition is not a last-ditch effort to make profits. The road to acquisition, if that is your end goal, starts right from the beginning. Have a sound organisational structure and be clear about the mission, value and purpose of your business.

In addition, buyers look for reputable companies, so work on growing your company’s presence — however novel or great your product or service is, if it remains unknown its potential will never be unleashed. Become an industry authority and keep expanding your customer or user base.

Beyond these criteria, acquisition managers also assess how smoothly the takeover transition will go. Do your company cultures fit? Do your employees currently enjoy the option to telecommute, and hence may find adjustments to a nine-to-five work arrangement difficult? Are your company’s values aligned with theirs — for example, do you place an emphasis on customer service like they do?

Many deals fall through because of such cultural mismatches. Hence, when the opportunity comes, make the effort to understand the acquiring company’s ins and outs as well as its expectations to ensure a seamless acquisition process.

Assembling a superior team

No company can survive without competent talents. They are like the components of a machine — one weak link can hamper performance, even cause it to crash. Your A-Team should comprise people who can not only contribute but also believe in your business and what you want to achieve. And as your business grows, new challenges and opportunities will arise. As such, look out for talents with a high level of adaptability, as they are the ones who can handle the pressure that comes from handling new fastidious clients or a changing environment.

Putting together a well-oiled team will yield other benefits too. With a tightening labour market, skilled workers are hard to come by. In the article “How to Get Your Startup in Line to be Acquired”, CMS-Connected reported that companies like Google, Facebook and Apple have been “acqui-hiring” startups as a way of recruiting talents into their fold. Indeed, having the right people on your team will make acquisition managers sit up and take notice of your business.

 

SOURCE REFERENCES:

https://www.techinasia.com/talk/asias-merger-acquisition-scene-notable
http://www.cms-connected.com/News-Archive/October-2016/How-To-Get-Your-Startup-in-Line-To-Be-Acquired
https://www.entrepreneur.com/article/229027