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Clare Advisors Releases a Guide for Business Owners Considering a Buy-Side Acquisition

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WASHINGTON, D.C., UNITED STATES, December 21, 2021 / -- Clare Advisors released a new guide on six key considerations for business owners considering a strategic acquisition. If the timing and market conditions are right, a strategic acquisition can help owners grow their business and increase their company’s value.

The guide lists several potential benefits of acquiring a business. For instance, agencies can seek to expand and diversify their client list, grow their services offerings, increase revenue, or improve profitability.

When considering these goals, it’s important that agency owners first narrow their list of objectives as a strategic acquisition may only achieve a few of these benefits with just one transaction.

An M&A advisor who is experienced in agency acquisitions can aid in the buy-side process and help see the transaction through to the end. Below are six things business owners should consider before they decide to invest the time, effort, and resources towards making a strategic acquisition.

1. Valuation: Agencies should have a value/maximum sum in mind for what they are willing to invest in an acquisition. It is also best to consider the structure of the transaction and how much capital you are willing to commit before you start conversations with an acquisition target.

2. Process: Many agency owners and management teams who are not familiar with buy-side acquisitions tend to underestimate the time it will take. A buyer should establish their criteria and timeline for buying a firm before starting any conversations.

3. Financing: Depending on the structure of the transaction and which (if any) financing options that a buyer can utilize, there will be a variety of cash flow and debt implications a buyer may experience.

4. Transaction Structure: A buyer will want to offer and negotiate a payout/earnout structure that will protect their investment going forward.

5. Customer Relationships: Owners should evaluate the client list and contracts of the business that may be acquired and plan how to manage these client relationships after the transition.

6. Risk: Every business acquisition has its risks. Agency owners should be aware of the financial, operational, and cultural/organizational risks of the acquisition.

Business owners or agencies who are considering a strategic acquisition can connect with an M&A advisor by visiting the Clare Advisors website.

John Burns
Clare Advisors
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