A business acquisition can offer a variety of different benefits in the real estate or other industries. Anyone considering an acquisition should first be familiar with the potential benefits of an acquisition and how Business law protections can help guide a successful transaction.
Potential benefits of an acquisition
There are a variety of different possible benefits of an acquisition for those considering one to evaluate including:
- Obtaining quality staff or additional skills or knowledge in the industry. If the acquired business has skills or knowledge that the acquiring company does not have, such as better management or systems processing, it can be a good addition to the acquiring company.
- Accessing funds or valuable assets for new development. If the acquired business has superior production or distribution facilities, it can be less costly to acquire them than to buy them.
- The business is underperforming. If the acquiring business is underperforming, it can be less costly to acquire an exiting company that to explain internally. An acquired business may be able to help the existing business with regional or national growth, as an example.
- Access a wider customer base and increase market share. The acquired business may have distribution channels that can allow the existing business to expand its customer base and market share.
- Diversification of products and services. The acquired business may have products and services that the existing business can sell through its existing distribution channels, diversifying its offerings.
- Reduce competition. By acquiring another company, the existing business can buy up its intellectual property and existing products and services that may be less costly than the existing company to developing the IP, products or services itself.
Overall, there are a variety of benefits to an acquisition including reducing costs and overhead, sharing marketing budgets; increasing purchasing power by lowering costs; and increasing revenues. It is important that the legal requirements associated with a successful acquisition are also met which is why acquiring companies need to be familiar with what those are.