Business acquisition journey: Six stages of buying a business

BDO Ireland
Insights
2026
Business acquisition journey: Six stages of buying a business

Business acquisition journey: Six stages of buying a business

Article

Published: July 21, 2026

Strategic acquisitions are one of the most powerful growth strategies, but understanding the key steps to buying a business in Ireland is essential to mitigate risk, seize value-driving opportunities, and manage the complex realities of modern M&A.

Business acquisition readiness in a changing deal environment

The nuances of buying a business can change quickly in today’s dynamic M&A environment, where market conditions can shift unexpectedly and new risks develop rapidly. Without adequate visibility into these factors and plans to address them, buyers run the risk of stalled deals, higher costs, operational disruptions, and missed opportunities.

“Understanding the acquisition process early allows stakeholders to anticipate key decisions, minimise uncertainty, and prevent delays that could impact value.”

Katharine Byrne, Partner and Head of Deal Advisory, BDO Ireland

When leaders approach acquisitions with this level of preparedness, they shift from reactive problem solving to proactive value creation.

Six stages of a strategic acquisition

No two acquisitions are alike. Each transaction is influenced by a combination of factors, from deal size and competitive dynamics to workforce complexity, regulatory requirements, and tax implications. Still, most acquisitions follow a series of interconnected steps, each carrying distinct nuances and considerations that can materially affect the outcome.

Strategy and target identification

A clear acquisition strategy and disciplined target identification establish the “why” behind a deal and shape every decision that follows.

“The foundations of a successful deal are laid well before the transaction itself, through a robust acquisition strategy and early clarity on the objectives and intended outcomes of the investment,” says Byrne.

Whether your goal is geographic expansion, capability enhancement, talent acquisition, or market access, clarity at this stage shapes every decision that follows. Leaders must define what success looks like with specificity, conduct a structured scan of the market, and engage in a thoughtful analysis of strategic fit. Businesses without established market intelligence capabilities may struggle to access the depth of insight needed to identify and evaluate the full range of opportunities.

Equally important at this stage is starting to think about post-acquisition integration. How will the acquired business fit operationally, culturally, and technologically within your existing organisation? Integration planning should begin early, as it informs not only target selection but also the resources, timelines, and leadership alignment required to realise the deal’s intended value.

digital-reporting

Preliminary evaluation and engagement

Preliminary evaluation and engagement bring focus and discipline to the acquisition process by confirming strategic fit before significant resources are committed to full-scale due diligence. Once potential targets are identified, the focus shifts to early dialogue to assess alignment, high-level financial analysis, and an initial evaluation of whether the opportunity warrants deeper investigation.

The goal is to validate whether the target checks the boxes established during the strategy phase and aligns with your strategic objectives for pursuing an acquisition in the first place.

negotiation-icon

Deal structure and negotiation

Leaders must determine how to structure the deal to balance risk, returns, and cash flows. Consider questions like:

Will this be a share purchase or an asset purchase?
Does an earnout make sense?
Should vendor financing be part of the equation?

From a legal perspective, considerations around representations and warranties insurance, indemnities, and transition services agreements all require careful attention.

Ultimately, the way a deal is structured and negotiated lays the groundwork for the success of the acquisition and the relationship between the parties post-close. Thoughtful structuring helps align incentives, supports integration, and ensures that the transaction delivers the intended strategic and financial outcomes.

person-checklist-icon

Due diligence and valuation

Due diligence gives crucial information on a target’s finances, operations, prospects, and legal issues. This stage helps surface risks, identify red flags, and ensure the deal terms reflect the true risk profile of the business. It sets the foundation for valuation assumptions and, in some cases, may fundamentally change how the opportunity is viewed—or even lead to a decision to walk away from the deal.

Acquisitions inherently involve risk, making it essential to evaluate whether those risks are well understood and acceptable. At this stage, advisors can play an important role in identifying potential risks and providing clarity through evidence-based analysis and scenario modelling. This approach helps ensure deal terms align with the risk profile uncovered through diligence.

Industry-specific momentum

Sector-specific considerations become especially important during due diligence, as risks, performance drivers, and value creation levers can vary significantly by industry.

The industries outlined below serve as examples where integration challenges and operational complexities can materially increase deal risk.

In manufacturing, for example, buyers must pay close attention to supply chain resilience, inventory management practices, and the remaining useful life of critical equipment. Considerations like cost structure directly impact earnings quality and future scalability. Environmental and health and safety compliance issues can introduce unique diligence requirements or regulatory issues that materially affect deal value.
For IT and technology businesses, the focus is less on physical assets and more on revenue composition (recurring vs. project-based), intellectual capital, and talent retention. The cybersecurity posture, data governance practices, and IP ownership become critical indicators of both enterprise risk and long-term value creation.
In transportation, warehousing, and distribution, operational reliability and cost efficiency drive value. Fleet age, maintenance practices, regulatory compliance, and customer concentration all merit careful evaluation, as they each have a direct impact on cost control and margin stability in a sector highly sensitive to fuel prices and labour costs.

deal-icon

Deal close

Deal close marks the formal completion of the transaction. Regulatory approvals are secured, purchase agreements are finalized, consents are obtained, financing is confirmed, and, if applicable, asset transfers are completed with clear title.

Equally important is getting your day-one readiness in place. This involves establishing payroll systems, ensuring key customer relationships are protected, and establishing clear communication to all stakeholders about what's changing and what's not.

people-around-table-icon

Post-acquisition integration

An acquisition represents a fundamental organisational transformation, not simply a financial transaction. The integration of two businesses affects operating models, leadership, decision-making, and culture long after ownership changes hands. Successful outcomes depend on having a clear integration strategy established prior to close.

Integration involves complex considerations like:

How will financial systems between the companies merge?
Are enterprise resource planning systems compatible, or does a new platform make more sense?
How do you address cultural differences between organisations?
What's the plan for talent retention, particularly for key personnel?

Understanding the fundamental phases of an acquisition helps leaders navigate complexity with greater confidence and, ultimately, extract more value from a deal while staying aligned with the original acquisition objectives. While these phases provide a useful structure, real-world acquisitions may require adjustment as conditions change.

“Acquisitions rarely follow a perfectly defined path,” says Byrne. “As market conditions shift and new information becomes available, priorities, risks and assumptions can change. The ability to remain agile, make well-informed decisions, and keep sight of the ultimate strategic outcome is what enables leaders to navigate complexity successfully.”

Business acquisition in practice: How due diligence reveals deal-critical risks

A disciplined, well-timed approach across each stage of an M&A transaction can mitigate risk and surface issues not apparent at first glance. Below are real-world examples of how we’ve helped clients identify hidden risks and strengthen deal outcomes.

Identifying hidden revenue risk in a SaaS acquisition

Opportunity

Our client was looking to acquire a Software as a Service (SaaS) business serving government agencies, a niche market that appeared attractive due to its high degree of specialisation and limited competitive pressure. On the surface, the company demonstrated stable, recurring revenue, but a deeper review uncovered potential misalignment.

Investigation

Through a detailed due diligence investigation, our team examined customer contract structures, renewal timelines, and buyer behaviour. This analysis revealed that a significant portion of the company’s customer base had contracts approaching expiration, with several customers actively exploring in-house alternatives. While revenue appeared recurring, it was increasingly driven by downsell activity and elevated churn risk.

This indicated that the company’s revenue trajectory was not as stable as initially presented and reframed the strategic assessment and valuation of the business.

Acquisition outcome

The diligence findings surfaced enough uncertainty around revenue quality and margin sustainability that the prospective acquirer could not rely on the reported financials as presented, prompting additional analysis. These insights ultimately enabled the acquirer to refine valuation assumptions and make a more informed, risk-aware investment decision.

Uncovering margin and working capital risk in a manufacturing acquisition

Opportunity

A manufacturing target appeared to have stable margins and working capital, but inconsistencies in standard costing and inventory practices raised questions about the reliability of historical financials.

Investigation

Detailed financial due diligence revealed significant inventory write-offs recorded just prior to the potential sale. These adjustments cast doubt on historical margins and had direct implications for EBITDA and target working capital, highlighting the need to reassess past performance and future valuation assumptions. The analysis also identified elevated customer concentration, further increasing sensitivity to revenue volatility and downside risk.

Acquisition outcome

The prospective acquirer concluded that the overall risk profile was too high and elected not to proceed with the transaction. The diligence findings were identified early enough in the process to support an informed decision and mitigate the risk of value erosion post-close.

Content adapted from BDO Canada.