Acquisition is the fastest way to penetrate a market and minimize stress on employees and systems. It can also improve operational efficiency, repaying acquisition costs and achieving higher operating profits while enhancing profitability by eliminating the competition.
Successful acquisitions require identifying the right targets and integrating the two businesses. American Express has long used acquisition as the preferred method of sales growth. A well-executed acquisition is more cost effective and financially beneficial to the acquirer than internal sales growth.
Acquisition Steps:
Make sure acquisition fits into your overall strategy
Qualify your acquisition targets
Obtain necessary data
Make your offer
Strategy:
Reposition your business to become a dominant player in vacation packages
Expand your company’s reach through multiple-owned channels
Improve operating efficiencies to increase existing business profitability
Enhance your brand
Meet stakeholder requirements for profitability
Key Elements of Acquisition Target:
Fit your preferred supplier portfolio
Quality of management/staff
Ability to improve scale/achieve operational efficiencies
Less than three years on lease
Three years of externally prepared financial statements, including sales by major category
Break-out of owner’s compensation included in financial statements
Recent 12-month productivity report by agent
Written summary of current lease terms
Offer:
Seller assumes all liabilities prior to purchase date
Purchase price will be a percent of adjusted revenue for the 12-month period following the sale
Purchase price will be a ?X multiple of the most recent adjusted earnings based on:
Growth in cruise/tour sales
Cruise/tour portion of total business
Physical condition of location
Travel business consultants such as Travel Business CPR will also investigate and negotiate on your behalf. For more information, contact Tharwat Abouraya via email at tabouraya@travelbusinesscpr.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it or by phone: 202-595-4867 202-595-4867.