Negotiate and workout the best plan. Because purchase accounting requires the write off of goodwill and therefore lower earnings, most managers prefer pooling whenever possible. When negotiating, work out the best value to your plan. If you ve done your homework carefully, you have assessed the value to you of the acquisition candidate. If you pay even one dollar more than this reservation price, you lose.
Planning is everything.
Not only should you know your own reservation price, but you should also know what the target is worth to other potential buyers, including existing management in a leveraged buy-out. If all goes well, you will not need to pay any more than one dollar more than the value to the next highest bidder. Managing assets or people when you're the buyer can prove difficult. It's easier to predict an outcome of an acquisition if you only buy the assets, but often the customers underlying those assets are affected too and you need to plan properly to manage those people. In considering the acquisition of a company you need to take into consideration how it's personnel will be affected.