Is it worth it to FIRSTLY hire the services of a company that you would like to acquire?

July 11, 2022

by an intermediary in Barcelona, Spain

Hi all. This is something that I have been wondering lately. If you were to to acquire a company, i.e. a software one, would you hire their services first? This way, you could truly see how they work, perform and also if it is a "strategic fit" for your existing business group or just an investment. However, during this period of time, the company might get sold to another investor.

What are you thoughts, pros, and cons?

Reply by a searcher
from University of Pennsylvania in Hillsborough, CA 94010, USA

You can also approach them as a potential strategic partner. That way, you'll be able to access more internal information than a regular customer would, and at the same time observe how the strategic thesis may play out with the two of you and their end customers. You can always change the plan to an acquisition discussion before or after a formal strategic partnership. And if you can build a good rapport, they'll signal to you if they're approached by another potential buyer before accepting an LOI.

Reply by an intermediary
in Barcelona, Spain

This sounds like a great option redacted In fact this kind of approaches might be unnoticed and so the information extracted will be more real. In fact, in one of my companies, we are reached by many parties weekly to establish partnerships but I think that they want to be acquired, so it is also a way to attract interest. Thanks for sharing!

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