If new to M&A, best to pursue a small target to learn or wait for right target?

This topic contains 4 replies, has 5 voices, and was last updated by  Charles Ladas 4 weeks ago.

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  • #121877

    Greg Kitchen
    Participant

    For companies new to acquisitions, is it best to dabble with a smaller company to ensure you learn / get the process right or to go for a specific, better suited target understanding your learnings with the latter could be costly (e.g., overpaying, missing a key liability)?

    #121918

    I do not think that you can do it better if you go with the small company, each case is unique, the process is kind of standard. Use the right advisors for the right deal.

    #121921

    Ahmed Zainalabedin
    Participant

    It is difficult to choose one over the other. The company should go with the transaction that would lead to creating higher value.

    #122004


    Participant

    In the end, I think it’s about what fits the company strategy and LRP goals. Mix that with integration success risk. A small company that has more integration risk due to culture or other complexities may be harder to integration and realize value than a bigger target that has more synergies. Size may not always be the determining factor in the choice I submit.

    #122007

    Charles Ladas
    Participant

    I think it’s best to pursue the right target if it will actually help the acquirer achieve certain business goals. The acquisition must make sense from a business standpoint otherwise it’s a waste of time and resources.

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