Demonstrate a secure customer base ...
Any horizontal acquirer will need to believe in the stability of
the revenue and will want security through contractual
relationships. If the acquirer is buying the business to begin
cross selling into that customer base, they need to know that the
relationship is secure, profitable and won't change under their
ownership.
... and security of your supply chain
As with customers, the key aspect is security. Before going to
market, an entrepreneur should make sure that they have supply
agreements in place, which again, are unlikely to change. A
horizontal acquirer who will benefit from the ability to bulk buy
or at least buy at the entrepreneur's prices will want complete
security that they will be able to continue doing this.
Demonstrate the value the two companies will
create
The most important aspect of a horizontal acquisition is being
able to clearly demonstrate the value which the synergies between
the two companies will create:
Can you demonstrate the reduction in overheads that the acquirer
may receive through the acquisition?
Can you demonstrate the value that the acquirer could receive
through cross selling their services into your client base and vice
versa?
Is there spare capacity in your business that the potential
acquirer could utilise to increase their own profitability? Can you
put a value on it?
Source: The Daily Telegraph - Finance (Online) (28th
June 2011)
http://www.telegraph.co.uk/finance/businessclub/8602518/Selling-your-business-to-buyers-from-outside-your-sector.html