Acquisition mission: (a brief journey from theory to reality).

• Author: Savett, Lou

Has a client ever invited you to meet and discuss an acquisition? Usually, the meeting would include you, your client and the client's attorney discussing the acquisition target. You listen while the attorney describes the steps in the process, and check in with tax suggestions of your own. Financing issues are reviewed and everyone shakes hands. Driving back to the office, you mused about sending a bill for $1,000 at the end of the month for "discussions relating to a proposed acquisition.

Hold the champagne! You just missed a great opportunity.

Your education and background make you invaluable during an acquisition. CPAs are trained and experienced in investigation, evaluation and organization of data, and these skills make you a key player in the acquisition process. If you lack any information in industry knowledge, tax sophistication or valuation skills, you know how to find it.

[ILLUSTRATION OMITTED]

Here is a step-by-step acquisition format. It covers acquisitions only of privately held companies by other privately held companies, but many of the strategies and tactics are similar for public company acquisitions, though the statutes, rules and regulations governing such transactions are more extensive than can be covered here.

PREPARING THE CLIENT TO BECOME AN ACQUIRER is step one, but it's usually missed, except by experienced companies. Many acquisitions fail because the acquirer's management is not ready for its expanded role. This is especially true when the acquired entity is expected to operate as a standalone unit rather than a tuck-in to current operations.

Early in the discussion, make sure you understand your client's goals in making an acquisition. It's also a good investment in your time to help your client form an acquisition team. Generally, this team will consist of your client's CFO, lawyers, bankers and investment bankers. Internal control issues and any lack of management depth must be addressed ahead of the acquisition.

SELECTING A TARGET is next. Using the skills of an investment banker, create a list of targets. Through available (and usually local) business sources, prepare a wish list. Is the client seeking a strategic acquisition, one that complements current operations or eliminates a competitor? Or is it a financial acquisition, one required to stand alone and produce a return on investment? This distinction is vital and affects selection, valuation and control issues. You can research information through websites, credit reports, SEC filings and other sources. If your firm is larger, poll your partners and senior staff to find your internal resources.

APPROACHING THE TARGET...