Acquiring An Established

Venture
 Acquisition

An acquisition is the purchase of a

company or a part of it so that the
acquired company is completely
absorbed and no longer exists as a
business entity.
• An acquisition can take many forms,
depending on the goals and position
of the parties involved in the
transactions, the amount of money
involved and the type of company.
 Advantages
• Established business
• Location
• Established marketing structure
• Cost
• Existing employees
• More opportunity to be creative
 Disadvantages
• Marginal success record
• Overconfidence in ability
• Key employee loss
• Over evaluated
 Stages:-
• Finding a suitable business
• Getting the information you need
• Determining the price
• Negotiating the deal
• Financing the transaction
 Finding suitable business
• Do a self evaluation to ensure that running a
business is compatible with one’s own
goals,ideals,personality and abilities
• Decide what type of business would
correspond with one’s goals, and suit person’s
needs and experience
• Collect all relevant information on the
business and related macro-aspects
• Contact the prospective seller
• Evaluate the business and its future
prospects.Enlist the help of
professionals to fill in the gaps in
one’s knowledge or experience
• Determine the price
 Information required
• Market share
• Size of total market
• Geographic area of target market
• Stage of its life cycle
• Contact major clients
• Visit the adjacent businesses
Other sources of information:-
Central statistical centres
The council for scientific and industrial
research
Local municipalities
National productivity institute
Business Partners
Chamber of commerce
 Negotiating the deal
• The purchase of shares
• Acquisition of assests
 Finding Finance
• Security
• Loan amounts