Questions and answers
Frequently Asked Questions (Company Acquisition Advisory)
How does the company acquisition process work in practice?
Frankly, this process does not end with a few meetings. It begins with clarifying the objective and strategy, then continues with identifying suitable companies. After that come preliminary review, offer and Letter of Intent (LOI), detailed review (Due Diligence), contracts, and closing. The most critical difference is created by post-closing integration.
Why should I buy an existing company instead of building one from scratch?
Building from scratch means time and serious risk. An operating business, on the other hand, offers existing customers, an established team, and cash flow. This shortens the time to market and accelerates return on investment.
What should my main objective be when entering this process?
On the SME side, the most common objectives we see are increasing market share, entering a new region, expanding the product range, and creating cost advantages. Sometimes the priority is also to reduce competition by directly acquiring a competitor.
How do you find acquisition opportunities that fit me?
Filtered target lists are created through sector networks, databases, and advisor access. Most opportunities are already off-market, meaning companies that are not publicly visible in the market.
How do we understand what the company is really worth?
The seller's expectation and the real value are often different. At this point, a scientific valuation is performed using Discounted Cash Flow (DCF), multiple analysis, and comparable company benchmarks. Negotiation is then conducted based on this data.
How can I strengthen my hand in price negotiations?
You need to proceed based on data, not emotion. With a professionally prepared Letter of Intent (LOI), accurate valuation, and strategic negotiation management, significant advantages can be achieved on issues such as payment plan and warranty clauses.
When does the Letter of Intent (LOI) come into play?
When the parties shake hands on the main issues, it is prepared as a non-binding framework before moving into detailed review. It helps discipline the process.
Why is the review you call Due Diligence so important?
Because this is where the risk side of the transaction becomes visible. Financial records, tax obligations, legal processes, and the operational structure are examined in detail. The aim is to uncover hidden risks before signing.
What happens if hidden debt or legal problems come up?
With a well-managed Due Diligence process, these risks are largely identified in advance. In addition, the buyer is protected through warranty and indemnity clauses included in the contracts.
How can I trust the accuracy of the company information?
All documents are examined systematically through a Data Room, and cross-checks are performed. The aim is to make the decision based on verified data.
Why are contracts (SPA, SHA) so critical?
The Share Purchase Agreement (SPA) and Shareholders' Agreement (SHA) are the insurance of the transaction. Payment terms, authority distribution, profit sharing, and potential disputes are clarified through these documents.
Is the work over after the acquisition?
In fact, the real work starts there. If teams, systems, and culture are not aligned during the integration process, the expected efficiency cannot be achieved. The value we call synergy is created at this stage.
What exactly do you mean by synergy?
It is the situation where the total value created when two companies combine is higher than their separate values. In other words, 1+1 equals 3.
How long does the process take?
It depends on the size and complexity of the company, but it generally ranges from 3 to 9 months. Transactions that are rushed often create problems later.
How much budget should I allocate for this?
You need to account not only for the purchase price, but also advisory, legal, audit, and integration costs. Generally, 3-8% of the total investment goes to these processes.
Could I run this process myself? Is an advisor necessary?
It can be done, but the risk increases significantly. An advisor accelerates the process and reduces the margin of error in finding the right target, valuation, negotiation, and risk management.
How is confidentiality ensured? Could it spread in the market?
The entire process is conducted under confidentiality agreements (NDA). Your identity and intention are not shared in an uncontrolled way.
Can I obtain bank financing or investor support?
Yes, in a properly structured transaction, bank loans, investment funds, or partnership models can be brought into play. Financing structure is an important part of the process.
Is it better to acquire a minority stake or a majority stake?
This depends entirely on your objective. If you want control, a majority stake is required. However, in some cases, a minority investment with strong contractual rights offers a more flexible model.
Why does the seller want to sell the company? Is there a problem here?
Not every sale is problematic. There are many normal reasons, such as generational transition, seeking a partner for growth, or moving into different investments. What matters is the right analysis.
What are the most common mistakes?
Underestimating valuation, conducting Due Diligence superficially, failing to plan integration, and making emotional decisions are among the most common mistakes.