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Acquiring a Troubled Company

August 27, 2013

As the economy rebounds, businesses that have survived, and even thrived, may be tempted to acquire companies that have been less fortunate. The downturn revealed the cracks in many businesses, and their owners are coming to terms with a disheartening future.

Opportunistic business owners, sensing a bargain, may be wondering if the time is right to make an acquisition. Despite the perception that these “fire sale” opportunities represent value at a deep discount, there are risks involved. Once our clients have decided upon a potential takeover candidate, we walk them through a series of considerations to arrive at a decision that’s right for them.

The first and most obvious consideration is “why do you want to acquire this company?” The purchase should be a strategic fit, allowing for benefits such as increased marketshare, an extension of products or services, the addition of talented staff, intellectual property or equipment and real estate which can be beneficial. (more…)