What Is a Strategic Acquisition?
A seasoned business lawyer Washington, DC companies trust has a lot of experience in strategic acquisitions. A strategic acquisition is the purchase of company A by company B using stock or cash so that company B can gain a strategic advantage over competing companies. Company B can eliminate a competitor by buying them out, expanding production, or by acquiring the materials for a competitor’s product. There are also various reasons an acquisition can be extremely valuable.
A business lawyer Washington, DC residents recommend realizes that sometimes buying another company isn’t the right move. A few ways to grow your business can be by adding employees, opening another branch of your business, or increasing your marketing and advertisements. If this isn’t sufficient, you may consider a strategic acquisition.
After entering a strategic acquisition, two companies can produce things at a much cheaper cost by achieving economies of scale. This means they lower the average cost of production by increasing the amount of production.
Other Reasons to Enter into a Business Acquisition
1. Expanding Your Business
● Typically it is cheaper to buy a company elsewhere and use it to create more business for your company instead of starting a brand new company in the area.
● This is also helpful when you are looking to increase output or move production to somewhere like a warehouse.
● If your company does acquire a warehouse from the former company, then you don’t need to worry about approvals from the city or obtaining city permits because the former company already has them.
2. Inheriting Clientele
Clientele and connections of company A is researched thoroughly before a strategic acquisition by Company B. and their clients become the buying business’ clients. Sometimes companies keep the former CEO on as an advisor to keep those clientele relationships, especially with foreign industries and governments. The former CEO can maintain these relationships and add new ones as well.
3. Gaining New Products
A business lawyer in Washington, DC knows that when company B buys company A, they may also gain new products to help them conduct business. For example, if company B needs a particular software program to help them with time card management and company A has already patented and developed it, then that is an extreme benefit of their strategic acquisition.
Your Greatest Asset for Acquisition Is a Business Lawyer Washington, DC Clients Depend On
Having a solid financial advisor and business lawyer in Washington, DC to help guide you is essential for securing the best interests of you business. They will be able to recommend companies for you to purchase before making any decisions and your financial advisor can assure that you have the capital and that the acquisition is worth the investment. Your Washington DC business lawyer can also ensure your rights are protected as a buyer and can handle unexpected issues that may arise during the process. Business acquisition laws can be complicated which makes a skilled business lawyer Washington, DC thinks is invaluable!