TCII :: Management Consultants

As credit continues to tighten and the economy continues to slow, more and more companies suffering from cash shortages and low stock values will become targets for acquisition - whether wanted or unwanted.

Will your business be in a position to acquire the assets of a financially troubled competitor?

As the Financial Times pointed out in February, the amount of capital available to take advantage of the opportunity is far greater - and the number of players looking to pounce on troubled companies vastly larger - than in the last downturn. So this one is likely to be far more complex, litigious and drawn-out.

Thorough preparation is therefore essential. TCii offers the following good practice guidelines, among others.

1. Make sure your own company's financial foundation is solid.
   
2. Identify your acquisition target, e.g. by comparing competitor information with industry statistics, finding out who is accepting the unprofitable business you turn away, and talking to your suppliers and customers.
   
3. Carry out an in-depth analysis of your target.
   
4. Arm yourself with an opportunity-focused business plan before approaching your bank for the necessary line of credit.

What's your top tip for a trouble-free purchase? Or do you think it's better to stay out of the game altogether?