InSight

Exit and Growth Strategies for Middle Market Businesses

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Figuring Out Where Your Acquisition Target Lies On the Market Cycle

By B P Narayan | Jul 07, 2010

The only thing constant about markets is change! Perhaps, nowhere does this change manifest itself as clearly as in India where the economy and urban lifestyles are undergoing rapid evolution. As businesses  looking for investment opportunities in newer, brighter, upcoming segments with promises of steep growth rates and quick returns, there is no dearth of good acquisition targets. With the buzzword among companies seeking rapid growth being “boom” we often hear of a ‘boom in the retail sector’, a ‘boom in the housing markets’, a ‘boom in the consumer electronics space’ and similar financial headlines. This is often followed by a frenzy to tap into these opportunities and overcrowding in many cases. Finding themselves in a situation not as promising as they envisioned, exits are sought making it all the more difficult for companies to acquire the right assets. So how do you know if the business you’re looking to acquire is going to stay on the high growth path or struggle?

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