Chris Evans

24th March 2022


How to avoid making a bad acquisition deal in 2022

The key to ensuring a merger or acquisition deal goes smoothly and delivers on strategic objectives, is to do start your own due diligence from the start, assess every option and build yourself a credible shopping list. So many business leaders fail to adhere to those basic principles and, ultimately, their acquisitions fail to deliver the expected returns.

Since 1987, Plimsoll has helped thousands of the world’s leading companies with their acquisition search. The solutions we have developed over the decades reduce the time it takes to find the best prospects from months to minutes. During our extensive acquisition work, we have found that most deals fail to live up to expectations because buyers fail to fulfil the following steps:

Shortlist the right companies

Any successful M&A strategy starts with building a list of potential targets. But in this age of infinite information where do you begin? You might have recommendations from a whole host of people, but how do you know which options are viable? While these recommendations might turn out to be excellent, the company in question must be thoroughly vetted, analysed and compared to other options in the market.

Plimsoll can help you to compare the performance and long-term prospects of every potential acquisition in your market. With a few basic criteria, a pool of thousands of options can be narrowed to 10 or 20 in just minutes. Instead of spending months researching, we can help focus your efforts on a viable shortlist of companies faster.

Benchmark your target acquisitions against peers

Once you have a list of potential targets, you can start looking at the details of each business and filter them down to a manageable shopping list. You will need to compare each of your targets against each other, but depending on the profile of your acquisition criteria it may be advisable to benchmark your targets against other industry peers. Understanding the long-term financial health of any company you are interested in buying before the transaction is critical.

Plimsoll provides the tools to help you find who meets your criteria and the hot prospects you might otherwise miss. Using Plimsoll’s unique performance model and valuation, you can assess how each business might benefit your existing operation. Whether you want a distress bargain or are prepared to pay for a premium target, Plimsoll can ensure you assess your options thoroughly and let you look for unseen opportunities 

Assess cultural and strategic fit

Acquiring a company is more than just a financial decision. Other important factors that can play into the success or failure of a transaction involve people and processes. Strategically speaking, does the acquisition provide you access to new markets or reduce your dependency on suppliers? Will potential growth be immediate, or could your investment take some time to pay off?

You’ll also likely be taking on a new team, one with its own legacy and ways of working. If this is dramatically different from the culture in your current business, it’s worth considering the impact this could have on a smooth transition.

Plimsoll removes the broad searching element of acquisition prospecting. We leave you with a manageable list of targets so you can concentrate on researching those that might fit best.

Pay the right price

There is always a touch of secrecy surrounding the ultimate cost of acquisition. The critical thing is to have a starting price for negotiations. A seller will want top dollar so it is important to have a value on any target and a benchmark of alternative purchase options. Much like buying a home, you must be prepared to move on to other options if the price is not right.

Always have a price in mind before entering negotiations. Plimsoll provides a comprehensive, multi-year valuation on each potential target so you can instantly filter on that most important measure. For each potential target, we also provide a 5-year valuation trend and a “future year” detailing what a company could be worth post-acquisition.

If you’re looking to grow your business through acquisition, Plimsoll can help reduce the search and identification process of finding acquisition targets from months to mere minutes. We offer a range of services and products that are designed to help business leaders to quickly narrow millions of potential options in varied markets, sectors and even countries into the handful that you could realistically consider.

 We have thousands of industry-specific studies to let you filter down the companies that meet your criteria or we have our Acquisition Finder Service whereby we do all the hard work and present you with the 10-20 best possible targets. For more information please visit: