Acquisition Criteria

Sep 23, 2014


The criterion employed by a buyer to identify suitable acquisition candidates in a business transaction in a main street or middle market transaction traditionally has three components.  The first component is the type of business the party would like to purchase for future entrepreneurial activity.  This component can be very specific (injection molded plastic fabrication) or general (manufacturing).  It can also be industry agnostic based on a return on investment objective or another acquisition profile criteria (e.g., “green” companies).  The second component is the geographic location for potential acquisitions.  This component can be specific to a city, state, region or country.   It can also involve searching for a company that can be relocated to the buyer’s location of preference or operated virtually.   The final component is the amount of capital allocated for the acquisition.   This component can include personal resources, investor resources, and /or resources obtained from the banking community.   It is important that a buyer only negotiate in “good faith” if they have the capability & resources to complete a transaction or the transfer of goodwill between the parties at time of sale may diminish.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media and the mergers & acquisitions community on how to select a suitable business for acquisition and any other subjects relevant to the purchase & sale of a business.