1. State the strategic gap
Describe the market access, capability or scale you are missing. Compare acquisition with other ways to address the gap. A clear rationale prevents the availability of a target from becoming the strategy.
2. Set selection criteria
Define must-have capabilities and acceptable limits: market, geography, size, ownership, financial profile and integration demands. Separate essential conditions from preferences.
3. Test the standalone business
Understand how the target earns and converts cash before adding synergies. Examine customer relationships, management, operating capacity and the investment required to sustain performance.
4. Challenge the synergy case
For each proposed synergy, identify its owner, dependencies, cost, timing and evidence. Distinguish benefits that can be influenced from those that depend on customers or other external decisions.
5. Connect financing and integration
Acquisition funding and post-completion investment compete for resources. Model both and identify the management capacity required to integrate while continuing to run the existing business.
6. Define reasons to stop
Agree conditions that would invalidate the thesis. Track findings against those criteria during diligence so that momentum does not replace judgement.
Your first conversation
Bring the growth objective, existing capabilities, target markets and constraints. A named target is useful, but not essential: the search can begin with a well-defined investment thesis.