Home Business Insights & Advice Growing your business through international acquisition

Growing your business through international acquisition

by John Saunders
14th Oct 22 10:10 am

One of the easiest ways to expand your business internationally is to acquire a new one overseas. This is an operation that’s proven effective for many businesses in many territories. However, this is a procedure that’s not right for everyone. Let’s take a look at a few of the pros and cons, and how you might go about expanding your business in this way.

What is acquisition and how does it work?

When one business buys another outright, it’s called an acquisition or a buyout. The purchasing business has the option of retaining the existing assets and staff. International acquisitions occur when the buying company and the company being bought are in different territories. This is often used as a means of the former establishing itself in a new part of the world.

Finding the right business

When you’re seeking to acquire a business, it’s vital that you identify one with the qualities you need. This will remove the need for you to make adjustments and changes later on. Often, you can get a better deal if you look for a business which has the right qualities, but which is struggling to realise its potential because it lacks a certain something – which you can then provide.

Accounting and finances

It’s vital that you inspect the finances of the firm you’re looking to buy. This will help you to avoid any nasty surprises later on. You could easily find yourself burdened with a business that wasn’t what it seemed to be – and even if you are able to disentangle yourself from the resulting mess, you’ll have lost time and effort, and possibly the opportunity to take a different course of action.

You might avoid these problems by having an international accountancy service inspect the company in question on your behalf. Since accounting practices differ from region to region, getting the right expertise on your side can be crucial.

Meeting and understanding the business

In most cases, acquiring a business is a major thing. You’ll want to therefore inspect the business in person, including any major assets, and to get a feel for the culture. This will almost always involve travelling to the territory in question.

With a face-to-face meeting, you’ll not only get a feel for the way that they do things; they’ll also be able to understand what you’re about. Make a good impression and communicate your values, and you’ll encounter less resistance when you come to make changes.

Restructuring

It is very unlikely that the business you’re buying will be fit for your purposes on the day of the acquisition. Some restructuring will therefore likely be neccesary. If you have an idea of the changes you’d like to make before the purchase goes through, then you’ll stand a better chance of avoiding problems.

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