Great article from the tax conscience acquirer view

Implications: During an international acquisition, an acquirer must consider several areas, before completing the purchase. This article collectively highlights several areas to consider such as tax credits, structure, pre-existing subsidiary structure, foreign tax laws, and wording in the LOI/definitive agreement. But what should the acquiree do to make itself more attractive?

Analysis: I’ve been involved in several international acquisitions- some where my employer had little if any market share. In each case we took extra measures to insure we were taking the appropriate steps so the international rules had little effect on the strategy for the acquisition. When an acquirer has an existing market share, the financial strategy behind the purchase becomes much simpler.

But from an acquiree viewpoint, what can you do to make yourself more attractive? First and foremost, keep your books clean; adhere to local law as if you were publicly owned. In the US, make sure your revenue recognition policies pass the litmus test, you have SOX policies and control points documented, your third party contracts and reseller agreements are clean, your lender agreements are straight forward, and your accounting and reporting systems are updated (you’re not using Excel to balance your accounts). For international companies, this means adhere to local tax and personnel laws. If an acquirer has a compelling reason to acquire you, they will take the necessary steps and make the necessary structure as to not take away from the strategic reason for the acquisition. The last thing an acquirer wants to let happen is to lose an acquisition for a non-strategic reason (the purpose for G&A is to support the company, not drive the direction).