Acquisition screen and synergy thesis

What it is

A structured screen of potential acquisitions against criteria set before any target is in view, followed by a synergy thesis for the survivors. The thesis names each synergy, who in the combined business would own it, when it lands, and what integration work has to happen first — which is where most deal cases quietly stop.

The strategic reason

What you are buying that you cannot build or partner for. Written first, because it is the criterion every target is screened against and the one most easily lost once a name is on the table.

Screening criteria

Size, geography, capability, culture, ownership, price expectation. Agreed before the first name goes on the list, or they will be written to fit the target somebody already likes.

The longlist and the funnel

Everything meeting the criteria, then the cuts, with the reason recorded at each stage. That record is what you need when the board asks why an obvious name is missing.

The synergy thesis

Cost synergies, revenue synergies and capability transfer, kept separate. Cost synergies are usually real and overstated; revenue synergies are frequently neither.

Integration cost and difficulty

What it costs to combine, in money and in management attention, and how long the acquired business is distracted. This is the number that turns good deals into average ones.

Walk-away price

The price above which the case fails, set before negotiation starts. Deciding it during a process is how a disciplined buyer becomes a motivated one.

How you run it

1. Write the strategic reason before any namesWhat this buys that building or partnering cannot. Everything downstream is screened against that sentence, so it is worth an hour.
2. Agree the criteria in advance, and date themCriteria written after a target is in view are written to fit it. Dating them makes a later change visible rather than invisible.
3. Screen wide, then cut with reasons on the recordA longlist of forty is cheap to build. The recorded reason for each cut is what makes the shortlist defensible to a board.
4. Split the synergy thesis three ways and name ownersCost, revenue and capability, each with somebody in the combined business who would carry it. Unowned synergies do not arrive.
5. Price integration, then set the walk-awayIntegration cost and the months of distraction, subtracted from the synergy. The price at which the case fails is set now, not in the negotiation.

The prompt

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