Buying a Business

There are only two ways of growing a business: through organic growth or acquiring another business. There are many good reasons for buying a business:

  • To expand into a new geographic area, much simpler and often less costly than building up a business from scratch.
  • To acquire:
    • New clients;
    • Technology or intellectual property; (it may be faster or less expensive than creating technology or intellectual property yourself)
    • Well trained, highly skilled employees;
    • Equipment;
    • Facilities;
    • Good retail locations.
  • A way of improving a company’s competitive position, also potentially eliminating a competitor, or potential competitive threat.
  • May help accomplish vertical integration (e.g. acquiring a supplier or client), to increase value added along the value chain, or secure exclusivity to a highly desired product.
  • An excellent way of creating economies of scale or synergies, including improved buying power, greater inventory turns and reduced working capital, relative to the size of the business.

While the above list is in no way exhaustive, it becomes apparent that any good acquisition program should begin with a thorough strategic analysis. Some business owners acquire other companies as a means of making their company larger and more attractive for potential investors, thereby facilitating their own exit later.

Robbinex offers comprehensive acquisition-related services:

  • We work with company owners and management on the strategic analysis that drives the acquisition program; as a result, detailed acquisition criteria are defined.
  • We identify and contact companies that fit the acquisition criteria, determining suitability and willingness of target companies to be acquired.
  • We perform a business valuation of the target company.
  • We assist in negotiating all agreements (confidentiality agreement, term sheet, agreement of purchase and sale, etc.)
  • We assist and coordinate the due diligence process.
  • We assist in closing the transaction.
  • Optionally, we may assist in obtaining acquisition financing.
  • We may also assist with integration of the two businesses once the acquisition is completed.