An acquisition can add customers, capacity and expertise, but integration can require additional spending. Include systems, people and working capital in the financial plan.

Review the reliability of the acquired business's income and the costs of combining operations. Expected savings may take time to appear.

Repayment should reflect conservative combined cash flow. A purchase only supports growth if the enlarged business can operate effectively after completion.

Key takeaways

  • An acquisition can add customers, capacity and expertise, but integration can require additional spending.
  • Review the reliability of the acquired business's income and the costs of combining operations.
  • Repayment should reflect conservative combined cash flow.