From: http://www.bizjournals.com/

The decision to grow through acquisition is a major decision and investment in terms of time, money, effort and energy.

Yet there are many positives — you will be able to build critical mass and market position or enter new markets and product niches. You may also expand into new geographies and capitalize on operating synergies.

Most acquisition processes involve four broad stages: Pre-acquisition, due diligence, deal negotiation and post-acquisition.

In the process of navigating the pre-acquisition and due diligence stages of a potential acquisition, both the buyer and seller should have had an independent valuation conducted by a professional who specializes in valuing companies for merger and acquisition purposes.

Stick with the value your professionals tell you. If the current business owner has a preconceived, unrealistic notion of the business’ worth, it may be difficult to continue. If everything is giving you the green light, here are some tips for the deal negotiation stage of the acquisition process:

1. Communicate directly with decision-makers at the target company
2. Highlight your company’s strategy, strengths, reasons for interest and plans for the target
3. Communicate your understanding of the target’s business by sharing target company research
4. Continue to pursue and communicate with senior people at the target in a confidential manner
5. Regularly share successes of your company such as new customer wins, expansions and joint ventures

Negotiations can be tough for both sides; the acquisition process can be emotional and requires careful handling. The more information you have collected during the due diligence stage, the stronger your case will be in your offer.

Keep your original objectives in mind. You may need to walk away if there are obstacles to achieving your objectives. If you continue to talk yourself into why completing the transaction would be good for your company, it could be a sign to walk away.

Your advisors will assist with negotiation and documentation support and any purchase price adjustments. Your accountant will look at financial and tax structuring as your attorney draws up the sales agreement. The contract is contingent on a final examination of all assets to validate what is represented in the deal and a final inventory of assets.