Insights — Acquisition & Buy-and-Build — 3 min read
How to Compare and Prioritise Acquisition Targets
A long target list is a liability, not an asset. Here is how to filter and prioritise targets so you only approach the most valuable opportunities.
In short
Comparing acquisition targets requires a weighted scoring matrix that evaluates each business against your specific acquisition thesis. The primary comparison factors should be strategic fit (how well it fills a gap), operational feasibility (how hard it will be to integrate), and commercial upside (what the potential synergy looks like). By scoring each potential strategic target against these criteria before initiating contact, you can focus your senior management's limited time on the top 10% of opportunities.
One of the most common pitfalls in a buy-and-build strategy is 'deal fatigue'—spending months chasing dozens of mediocre targets only to find you have no energy left for the one that really matters. A long target list is not a sign of progress; it is a sign that you haven't yet defined what you are looking for.
To build a repeatable acquisition pipeline, you need a way to compare companies objectively. This article provides a framework for prioritising targets based on commercial signals and strategic alignment. Evans provides the research and intelligence to populate this framework; we do not provide valuation, financial due diligence, or transaction advice.
Moving Beyond the 'Gut Feeling'
Most acquisitions start with a founder saying, 'I like the look of that company'. While intuition is valuable, it is dangerous when used in isolation. An objective comparison matrix forces you to consider factors you might otherwise ignore, such as systems compatibility or customer concentration.
The Target Comparison Matrix
We recommend scoring each target from 1 to 5 across four key dimensions. The weights for each dimension should be decided based on your acquisition thesis. For example, if you are a cash-rich company looking for technical talent, 'Capability Fit' will have a higher weight than 'Financial Stability'.
| Dimension | What we score | Example Signal |
|---|---|---|
| Strategic Alignment | Does it fit the core goal of the thesis? | Access to a specific geographic market |
| Operational Readiness | How 'turnkey' is the management and systems? | Stable second-tier management team |
| Commercial Headroom | What is the potential for cross-sell or growth? | Complementary products for the same customer |
| Integration Risk | How likely is culture or tech to clash? | Different delivery models or core tech stacks |
Weighting Your Criteria
Not all criteria are equal. A business that is a 5/5 on fit but a 1/5 on integration risk may be a better target than one that is a 3/5 on both. The weighting is where your strategy comes to life. The Build My Acquisition Thesis tool is the best place to define these weights before you start scoring targets.
Filtering by 'Knock-Out' Factors
Before you spend time scoring, apply 'knock-out' filters. These are non-negotiables that immediately disqualify a target. Common filters include:
- Minimum/Maximum Turnover: Too small and it's a distraction; too large and it's a risk.
- Geographic Location: (If physical presence matters).
- Core Sector: Does it operate in a prohibited industry?
- Ownership History: e.g., 'Will not acquire from Private Equity'.
The Priority Tiers: A, B, and C
Once scored, categorise your targets into tiers:
- 01Tier A (Top 10%): The 'Strategic Gems'. High fit, low risk. These get personalised, direct outreach from the CEO or Founder.
- 02Tier B (Middle 30%): The 'Solid Bolt-ons'. Good fit but perhaps higher risk or lower upside. These get a standard professional introduction.
- 03Tier C (Bottom 60%): The 'Watchlist'. Not a priority today, but worth monitoring for changes in ownership or market position.
Maintaining the Comparison
Prioritisation is not a one-time event. As you learn more through research or initial conversations, a target's score will change. A 'Tier A' target might drop to 'Tier C' if you discover they have a toxic culture or a major undisclosed customer risk. The Acquisition Opportunity Engine automates the early stages of this scoring, ensuring your Tier A list is always based on the most current commercial signals.
Resource Allocation: The Cost of Chasing
Remember that every Tier A target you pursue requires significant management time. By prioritising strictly, you ensure that when a genuine opportunity arises, you have the bandwidth to execute it properly. Chasing ten Tier B targets at once is a recipe for failing at all of them.
Considering growth through acquisition?
Acquisition Opportunity Engine identifies and researches businesses that fit your acquisition criteria — on-market listings and potential strategic targets that are not known to be for sale — and helps prioritise where to look first. Commercial research, not transaction advice. From £695 + VAT per month.
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