OVERVIEW OF ACQUISITION PROCESS

1. Establishing the acquisition objectives 

2. Identify potential candidates by use of screening procedures.

3. Narrowing the initial list of target companies.

4. Initiating contact with a target's management to determine their receptivity to an offer and possibly to acquire additional information.

5. On the basis of the forgoing, making a realistic evaluation of the feasibility of an acquisition.

6. Obtaining financial statements covering the last five years and relevant contractual & leasing information.

7. Establishing an offering price, together with the terms and conditions and the form (cash, stocks, notes, etc.) by which the price is to be paid. 

8. Exploring the sources or financing.

9. Issuing a nonbinding agreement in principle (usually in letter form) outlining the above pricing proposal and stating positions on such matters as maintaining continuity of management, brokerage fees, etc.

10. Undertaking an in-depth (due diligence) study of the target.

11. Preparing and signing the acquisitions contract.

12. Closing - (the actual transfer of assets and payment of considerations).

 

SOURCE: Levine Sumner (Editor), The Acquisitions Manual, NY Institute of Finance, 1990