When seeking potential acquisitions, a purchaser is seeking:-

• Strong customer and client lists
• Strong brands
• Experienced management teams/key staff
• Access to new markets, key supplier relationships, licences
• Intellectual property

Ultimately the purchaser wants to acquire future positive cashflows, which are either in place or have the potential to be realised.  Acquiring an existing business is often regarded as less risky than starting a business from scratch. A purchaser must do their “homework” to make an acquisition successful:-

• Ensure the target is a “good fit”, both culturally and that it complements the purchaser’s existing business
• Assess the value of the target business. Examination of historic financial performance and more importantly the assessment of future financial results and cashflows.    Assessment of the risks for the target business and the sector in which it operates
• Due diligence to determine possible issues relating to employees, title of property, licences, intellectual property, working capital, insurance, banking facilities, taxation and environmental matters
• Structuring of the acquisition and tax planning
• Funding mix – senior debt, alternative lenders and equity providers
• Ability of future cashflows to service leverage, equity returns, working capital and required capital investment

A properly prepared purchaser is better equipped to negotiate a price that will deliver value for its shareholders.  Businesses don’t typically sell at the initial price set by the seller, the variance is dependent on the parties’ knowledge of the business and sector and the parties negotiation skills. We advise purchasers to engage early with their accountants, tax advisors and legal team to assist in the process.  Cooney Carey work with both buyers and sellers and our expertise is business valuations, tax planning/structuring and negotiation.

WHAT QUESTIONS DO YOU HAVE?

If you have any questions or would like to talk to any of the Cooney Carey team, please contact us on 01 677 9000 or info@cooneycarey.ie.  We would be delighted to assist you. To keep in touch, connect with us on LinkedIn.