ARTICLE · 15 FEBRUARY 2012

Corporate Acquistions - Avoiding The "7 Deadly Sins"

Duff and Phelps

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Business owners and executives sometimes look to acquire another company as a means of growing their business.

CanadaCorporate/Commercial Law

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Business owners and executives sometimes look to acquire another company as a means of growing their business. While corporate acquisitions can help in achieving growth objectives, it is important to avoid those things that can significantly erode shareholder value, and possibly be disastrous.

While there are numerous reasons that acquisitions fail to yield the results anticipated, this article addresses some of the most common reasons for failure. These "7 deadly sins" are summarized in Exhibit 1:

Exhibit 1

The 7 Deadly Sins of Corporate Acquisitions

Lack of strategic fit

Inadequate analysis

Too much emphasis on EBITDA

Ignoring the balance sheet

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