As technologies mature and high rates of growth become more difficult to achieve, many companies look for acquisitions to maintain growth, augment their product lines, obtain new technologies, and remain vital.  SMG has found that even companies that are not commonly considered large enough to undertake acquisitions can gain significant value through purchasing closely related businesses.

It is extremely important to understand how an acquisition fits with a company’s business strategy and what specific assets are being sought.  Understanding this fit will also help a company field unsolicited requests from other companies seeking to be bought and to implement screening criteria that will quickly separate those with high potential from the rest.

The goal in any acquisition is to obtain significantly more value than the purchase price.   By understanding their core strengths, acquirers will be able to extend, augment, or add new capabilities to enhance their market, technical, financial, and competitive positions.

SMG's Experience with Mergers & Acquisitions

SMG has been involved in all phases of the acquisition process including developing the business strategy, determining the goals for the acquisition, identifying and screening opportunities, conducting due diligence, and assisting with post-acquisition operating combinations and revenue achievement.

From this experience, we have learned that a well-organized and disciplined process is essential to undertaking and concluding acquisitions that achieve a company’s goals.  Too often companies respond in ad hoc ways to opportunities and shortchange good planning and investigative processes.  SMG brings a disciplined and ordered approach to identifying, qualifying, and evaluating acquisitions, remains objective and data driven, and adheres to the company’s strategic goals throughout the work.

Examples of our Mergers & Acquisitions experience include:

Enterprise Software Company:
SMG was asked to assess the market’s interest in new products resulting from the purchase of a smaller and not well-known software vendor.  Working with the client to develop a target list of contacts, SMG conducted telephone interviews to determine the nature and strength of the acquiring company’s “brand” and its ability to generate incremental sales.  This information had direct impact on the value of the acquisition and the expectations and planning for its integration into the parent company.

Retail Back Office Software Company:
Our client had already identified and was beginning negotiations with its target acquisition.  We were asked to determine the ongoing business potential of the acquisition, analyze its cash requirements, and validate the forecast provided by the target company.  The strategy driving the acquisition was to gain access to new technology, but the client did not want to be constrained by an operating cash drain.  SMG rescaled the business’ revenue model and identified the areas for expense management that were necessary to avoid significant cash requirements.