Acquisitions usually start with a phone call: a banker with a company for sale, a competitor that wants to exit, a founder looking for a buyer. The opportunity is real, the timetable is short and the conversation quickly moves to price. What is often missing is the question that should come first: why should we, of all possible owners, own this business?
Write the deal thesis before you see a target
A deal thesis is one page that links acquisitions to strategy. It states which capability, market or scale the company needs, why buying is better than building or partnering, what kind of target fits, what the company brings that makes the target worth more in its hands, and the financial limits it will not cross.
- The strategic gap: what we cannot reach organically, or not fast enough.
- The target profile: size, geography, capabilities, customers and the deal-breakers.
- The value we add: the synergies and the advantages of ownership that only we can deliver.
- The limits: maximum leverage, minimum return on capital and the dilution we accept.
Run a funnel, not a single deal
A company that looks at one deal at a time compares it with nothing and tends to say yes. A company that screens the whole market against its thesis compares every target with the best alternatives and can walk away without losing its strategy.
In this programme, fewer than one in a hundred screened companies ends in a signed deal, and two out of three targets that reach due diligence are dropped. That is not failure; it is the discipline working. Each rejection is cheaper than a bad acquisition.
Serial acquirers that create value treat M&A as a capability: a standing team, a thesis reviewed every year, a funnel tracked like a sales pipeline and the same playbook from screening to integration. The rest of this series follows that playbook, step by step.
Bartor S.
Founder
