Evaluate Acquisition Situation
In order to maximize shareholder value and to enable investors to obtain optimum returns, the Company has to decide on its exit options. For most companies in today's economic environment, an initial public offering (IPO) is not a viable alternative. The vast majority of companies target being acquired as the most likely exit.
To position for an acquisition, it is important to evaluate factors affecting the Company's value to potential acquirers. Acquiring a technology company is typically driven by one or some combination of four objectives:
Customer Base - By acquiring a company with an established base, the acquirer can expand faster than through its own organic growth.
New Market/Industry - Another acquisition motivation is opening a new vertical market by acquiring a company with solid domain expertise and an established foothold.
Implementation - To increase its ability to implement solutions based on its products, one company may acquire another that possesses relevant implementation resources.
Product & Technology -The most likely exit for smaller technology companies is an acquirer who seeks to add products that enhance existing solutions.
Most acquiring companies work under the pressure to produce solutions, so reducing "time to solution" is high on their list of priorities. A key driver of the Company's strategy is to help potential acquirers to reduce the time to create a new solution.
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