The SME Acquisition Playbook

2. G0 - Buyer readiness

Inputs: strategic/personal objectives, available equity, intended debt capacity, management time and target countries/sectors.

Owner: lead buyer.

Action: complete a one-page acquisition thesis and transaction budget including advisers, diligence, financing and integration costs.

Stop if the buyer depends on an untested financing assumption or cannot explain why it wants to own and operate the business after closing.

3. G1 - Acquisition thesis

Define sector, geography, business size/economics, acceptable customer concentration, capex profile, management expectations, possible asset/share structures, equity envelope and immediate rejection criteria.

Evidence produced: One-Page Acquisition Thesis.

4. G2 - First-look screening

Review eight blocks before full diligence: market, growth, customers, profitability, cash, owner dependency, team and structural risk.

Use PASS, INVESTIGATE, PROGRESS as investigation labels, not DealPME investment recommendations.

5. G3 - Qualify as a counterparty

Trust is symmetrical. As the seller releases more, the buyer should progressively evidence identity, authority, thesis and financial capacity. FATF beneficial-ownership principles illustrate the importance of attributable counterparties without making DealPME a regulated financial institution.

6. G4 - NDA and disclosure

Before T2/VDR: executed NDA, admission/permission, defined scope, understood download rules and a named diligence team.

7. G5 - Management meeting

Ask questions that test mechanisms: why customers stay, how pricing works, where owner dependency sits, what growth required in capex, which risks management has accepted and what would change with more capital.

Failure mode: using the meeting to confirm a story already decided.

8. G6 - Offer or LOI

A credible offer links indicative price, value basis, cash/debt/working-capital assumptions, payment structure, financing, any exclusivity, remaining diligence, conditions/approvals and timetable.

Any legally binding effect requires counsel review.

9. G7 - Due diligence

Use an issue register, not only a checklist. Each issue should carry domain, question, source, status, potential impact, owner, action, deadline and any link to price, SPA, conditions precedent, financing or integration.

10. G8 - Financing

Build a Sources & Uses model covering price, fees, refinancing, working capital, immediate capex and liquidity buffer. Stress-test lower performance, delayed closing and higher cash needs.

11. G9 - Closing readiness

Closing should not depend on memory. Use a controlled checklist for final documents, approvals, conditions precedent, financing, transfers/formalities, signing authority, timing and post-close evidence.

12. Roles

13. Stop conditions

Stop or re-evaluate where identity cannot be attributed, authority to sell is unclear, major numbers cannot reconcile, financing is unrealistic, critical information is withheld without explanation, a regulatory issue remains unresolved, or there is pressure to sign before necessary professional review.

14. DealPME mapping

P08 qualification -> P09 matching -> P10 admission -> P11 NDA -> P12 VDR -> P14 offer/LOI -> P15 diligence -> P16 completion under applicable gates.

The acquisition decision remains the buyer's.

15. Evidence required at each gate

16. Financial discipline before LOI

Separate purchase price, equity required, debt, transaction fees, refinancing, minimum cash, working capital, immediate CAPEX and liquidity buffer. Headline price is not the same as capital consumed.

The model should include at least a base case, operating downside and funding/closing downside. Critical assumptions should be visible rather than buried inside a spreadsheet.

17. Diligence discipline

Good diligence is not designed to prove that a target is “good.” It identifies facts that change the decision. For each workstream define in advance: hypothesis, expected evidence, escalation threshold, owner, deadline and destination of the risk (price, SPA, CP, financing, integration, walk-away).

18. Management meeting preparation

Prepare questions in three columns: what we think we know / what we need to test / what evidence would confirm or disprove it. Avoid questions that merely invite management to repeat the teaser. Useful questions explore mechanisms: pricing, customer losses, renewal, unused capacity, key hiring, cash cycles, recent incidents and deferred investment.

19. Day 1 starts before closing

Before closing identify banking authorities, payroll, IT access, critical contracts, key executives, employee/customer communication, insurance, suppliers, governance, cash control, reporting and 100-day priorities.

Diligence should therefore hand operational risks into the integration plan. An issue that is legally resolved can remain operationally important.

20. Buyer exit checklist

• thesis documented and still valid;
• funded sources & uses;
• legal/tax structure reviewed;
• material risks documented with owners;
• model updated after diligence;
• LOI and final documents aligned;
• conditions assigned;
• Day 1 / 100-day plan ready;
• final decision documented by the competent decision makers.

21. Questions for professional advisers

Counsel: which obligations, consents and contractual risks could delay or prevent transfer?

Tax adviser: which consequences depend on structure, financing and jurisdiction?

Financial/QoE adviser: which earnings and cash flows are recurring and which adjustments are supportable?

Lender: which conditions must be satisfied before funding is available?

Operating expert: which investments and dependencies change the post-acquisition plan?

This resource explains; it is neither legal, tax or financial advice nor a formal valuation. Have your situation validated by a professional.