ü      The criteria for the business to be acquired.

ü      Formulate your acquisition strategy, including financing and timelines. 

Assemble Acquisition Team – It is vital to have a professional and experienced acquisition team in place from the outset. The key members of your team are your VR professional intermediary, an experienced transaction attorney, and a CPA with transaction and tax experience. Other team members may be your insurance professional, CFP or financial advisor, IT professional and technical advisors if you are acquiring a technology company.

Develop a Target List – Your target list can be developed from a number of sources. Your VR professional intermediary can work with you to develop a list of acquisition targets that meet your goals and objectives. 

ü      By refining your acquisition criteria you can narrow your list to companies that more closely meet your acquisition criteria.

Preliminary Review of Prospective Companies – A preliminary review of your target list will eliminate companies that do not meet your criteria.

ü      Select prospective companies and prepare a short list  

Initial Due Diligence – Business profiles for prospective acquisitions and company literature are your starting point.

ü      Review recast financial summaries to determine if the prospective company meets your requirements.

ü      Review company literature and business profile to determine if the company is a strategic fit and meets your strategic objectives.

ü      Schedule meetings with your short list of target companies.

Meet with Selected Companies - Your list has now been narrowed to a very few good prospects that you are prepared to meet with and enter serious discussions. 

ü      Review company financial statements and business profile.

ü      Review valuation information.

ü      Review company information, sales literature, and available information.

ü      Meet with target company management and tour company.

ü      Determine if this target company is a strategic fit and if it meets your acquisition criteria.

ü      Meet with your shareholders and decision makers, review target companies and make go/no-go decision.

Letter of Intent or Contingent Purchase Offer - Once you have determined this is the right company and it meets your acquisition criteria your next step is to prepare a Letter of Intent (LOI) or Contingent Purchase Offer. Whether an LOI or Contingent Purchase Offer is used will depend upon the particular circumstances of your transaction.

ü      Outline the basic terms of your offer with your VR intermediary.

ü      Purchase Price.

ü      Financing terms, down payment, bank financing, and seller financing.

ü      Consulting/Employment agreement.

ü      Initial earnest money deposit.

ü      Asset vs. Stock Sale – discuss with financial advisors and your VR intermediary.

ü      Prepare LOI or Contingent Purchase Offer.

ü      Review Pre-Closing check list with your VR intermediary.

Due Diligence - The due diligence phase is a critical phase of your acquisition. You and your advisors will thoroughly review the company’s financial statements, records and other documentation. 

Your next steps are

ü      Submit your due diligence list to the seller through your VR intermediary.

ü      Review financial statements, tax returns, records, company operational reports and procedures.

ü      Inspect the premises and overall operations.

ü      Meet with key employees and managers.

ü      Meet with the company management and leaders.

ü      Review your due diligence results with your advisors and make the go/no-go decision.

Documentation – Your VR intermediary works with you and your advisors to prepare the transaction documentation and prepare for closing.

ü      Pre-Closing Check list.

ü      Legal Documents for closing and finalizing the transaction.

ü      Employment or consulting agreements executed.

ü      Non compete agreements executed.

ü      Seller note and other financing documentation and approval.

ü      Purchase Price Allocation.

Closing – Your VR intermediary will guide you through the closing, reviewing the VR Closing Check List with you along the way. 

ü      Closing Check List.

ü      Sign documents.

ü      Wire the funds.

ü      Post Closing Check list.

ü      Prepare for the transition.

ü      Celebrate!