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Is a Business Acquisition in Your Future?


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9/21/2013
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Is a Business Acquisition in Your Future?

Acquisition is an exciting prospect for any business. For some people, acquisition is the end goal of a new startup. For others, acquisition is a stepping-stone to grow the business. Whether you’re being considered for an acquisition, or whether you’re considering acquiring another business, there are a few questions you need to ask yourself before you begin negotiation.

What are Your Assets - or What are You After?

If your business is being considered for acquisition, it’s time to put together a list of your assets. Acquisition is rarely straightforward. Assets may range from product sales and revenues to specialized machinery or even intellectual property. It’s important to list and categorize your assets - and assign an appropriate value to them - before you begin the negotiation process.

If you’re acquiring a business, it’s critical to know what you’re after. Are you acquiring a business to control a specific patent? Do you want to control sales of a certain product? Or are you looking to absorb the company’s capabilities to grow your own product in-house?

What are You Willing to Give Up - or What Will You Let Them Keep?

When you’re a business on the verge of acquisition, you should think about what you’re willing to give up. Are you willing to sell your business but license your IP? What are the key components of your business that you’re willing to give up, and what do you want to keep - or are you willing to sell it all for the right price?

If you’re acquiring a business, think about what you’re willing to let them keep. Maybe you only need one division of the company to achieve your objectives, and you’ll let them keep the rest of what they’ve built. Think about what you’re willing to let them keep so you can save money and have leverage during negotiation.

What’s Your Price and Terms?

Whether you’re buying or selling the company, you need to be very clear with yourself about your price and terms. It’s not uncommon for an acquisition deal that seems to make sense to be completely destroyed by a failure to agree on price and terms. Know what you’re willing to do in order to give yourself room to negotiate. It’s a good idea to consult with an experienced attorney to determine where to start and map out where to go with a business acquisition negotiation.



Category: Business and Commercial Law


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