The success of a transaction is contingent on several factors. The financial performance of the target company and its projections are among the most important factors. A strong balance sheet and consistent growth in revenue are good indicators. Other indicators include cultural compatibility, ability to scale operations and the presence of intellectual property like trademarks and patents.

A successful deal relies on a careful plan and execution. A thorough due diligence will aid in identifying potential roadblocks as well as pitfalls, which can be addressed before the deal is signed. This is especially important in deals that involve a substantial purchase of stock or cash.

An effective approach to deal sourcing involves building and maintaining a solid network of industry professionals and investors. These connections can provide early access to many off-market opportunities. For example a real estate agent may establish relations with investors and brokers to gain access to commercial properties prior to when they go on sale.

Acquirers judge the success of an acquisition by the goals they set, such as increase in revenue or synergy gains. These goals are often met or even exceeded, encouraging acquirers to believe that they’ve made a difference. This may be at the expense of the current business that may not perform as anticipated.


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