The Value of Intelligence for Acquisitions

By CTC Staff Business Intelligence

“The time to engage an intelligence firm is before you pick your acquisition target.”

Corporations that rely on lawyers and accountants to conduct due diligence after engaging an
acquisition target are acting too late. Intelligence helps identify opportunities and risks and
provides in-depth information to help make decisions about pricing, timing, quality, and other
issues critical to making a purchase.

The time to engage an intelligence firm is before you pick your acquisition target. The best
opportunities are often the ones you don’t know about. Intelligence firms can help identify the
full gamut of possibilities globally and give options to prospective buyers that they may not even
know exist. Whether a company is looking for an established business with a strong customer
base to increase market share or distribute inventory or whether a company is seeking a premier
manufacturer of a complimentary product to increase capabilities, a global intelligence firm can
help find strong candidates to consider purchasing.

Once a buyer finds an appropriate target, they need to understand the true capabilities of the firm,
the underlying problems, risks from acquisition, the motivation to sell, and other data points that
will sway both the sale and the sale price. Traditional due diligence provides a partial picture of
the firm, but what is the data room hiding? Environmental issues, investigations that have not yet
resulted in litigation, reputational risks, and capabilities all impact the benefits of the investment
as well as the true price a target will accept. Knowing the issues before purchase will help avoid
overpaying and can help sidestep potentially catastrophic issues beneath the surface. They can
also highlight unpolished gems.

Experienced global intelligence firms are a critical part of any acquisition strategy, and can
provide the data to identify the best target at the best price and to help avoid major missteps that
undermine a successful acquisition.