Tool

Acquisition Mandate & Target Screen

Decide why to acquire, compare the alternatives, and prioritize targets against clear requirements, evidence, and a credible path to ownership.

What this helps you decide

Why buy instead of build, partner, or do nothing—and which targets satisfy the mandate?

The decision this tool answers

Download the Acquisition Mandate & Target Screen workbook · Excel · Version 1.0 · USD millions

An acquisition search should begin with a business need. What capability, customer access, or market position is missing? Why should buying a company be the best way to obtain it?

This workbook makes the acquisition mandate explicit, compares build, buy, partner, and do nothing, and organizes a target list around requirements and evidence. It gives a team a review order, a record of unresolved questions, and a defensible reason to pursue or pass.

When to use it

Use it before launching a search, when a new opportunity arrives, and when the business need or capital available changes. It supports Mandate and Thesis & Targets—the first two stages in The M&A Deal Workflow.

Start with a 15-minute mandate discussion. A useful first pass may conclude that building internally or partnering deserves more work before the team spends time approaching acquisition targets.

What to bring

Bring the business objective, capability and market gaps, time horizon, capital available, strategic boundaries, and the names of the sponsor and approving authority. For each target, bring an initial operating profile, the reason it fits, estimated capital and timing needs, and what is known about the owners and their willingness to transact.

Bring the documents or conversations that support each material assessment, with their dates and unresolved questions. A short list with clear unknowns is more useful than a long list filled with assumed answers.

Start with the gap

Describe the problem in operating terms. For example, a business may need a capability that it cannot currently deliver, access to a customer group it cannot efficiently reach, or a route into a market where its existing offer is weak. State the desired result and the time available to achieve it.

Separate the need from the proposed target. “Acquire this company” is a proposed action. It does not explain the gap, the buyer’s advantage, or the consequences of leaving the gap unresolved.

Name the executive sponsor who owns the business outcome and the authority who can approve the mandate. Sponsorship supplies accountability. Approval supplies permission for a defined scope. Neither establishes that a particular target should be acquired.

Compare four routes on the same basis

Build. Assess the people, technology, customer access, investment, and time required to create the capability internally. Include the possibility that delivery takes longer than expected.

Buy. Assess what the buyer would obtain, whether it can transfer, and the capital and operating work required to use it. The purchase price alone is an incomplete estimate of the resources needed.

Partner. Assess access, economics, decision rights, exclusivity, and dependence on the other party. A partnership can provide a capability without ownership, but the rights must support the intended use.

Do nothing. State what happens if the buyer preserves capital and continues its current course. Doing nothing can have an operating cost even when it requires little incremental cash.

Use the same funding horizon from the review date for all four routes and every target. Enter incremental cash required from the buyer and financing sources over that horizon: cash consideration, debt repayment, fees, integration, and additional operating investment where applicable. Exclude noncash stock or rollover and undrawn facility capacity. The envelope is a screening limit, not proof that financing is available. Record the capability delivered, timing, dependencies, main risk, and basis for the estimate. A route that is cheaper but fails to deliver the required outcome is not an equivalent alternative. The workbook supports comparison; it does not assign a weighted winner or calculate an investment return.

Set the mandate before ranking targets

Define the capability and market gap, the capital envelope, the maximum time to capability, and the boundaries of the search. State what the buyer must obtain and what it will not accept.

Use up to six screening criteria to make the mandate testable, and identify which are required. Keep at least one required criterion. Define the condition and the evidence that would establish it. Depending on the mandate, these might cover customer access, a scarce capability, transferable rights, durable earnings, management continuity, or an acceptable dependency profile.

A requirement should be specific enough that two reviewers can discuss the same evidence. “Attractive business” is too vague. A statement about a named capability, an acceptable concentration limit, or a required contractual right can be tested.

Keep preferences in the fit rationale and review priority. Required criteria are gates. A target’s strength in one area does not cancel a failed requirement in another.

Test whether the target can actually be bought

Strategic fit is only part of the screen. Record seller willingness, ownership complexity, who can deliver the required control, and the approvals or consents on which a transaction depends.

A willing contact may not control the sale. A valuable license or relationship may not survive a change of ownership. Identify these questions early enough to change the search, rather than discovering them after the buyer has built an attachment to the deal.

Mike treats missing seller control as a potential early stop. A scarce or strategically imperative asset may justify further investigation if there is a credible consent path. Record the specific basis and approval for that exception. A possible path remains conditional until the required control or consent is established.

Keep a fatal veto explicit. A priority number, attractive growth, or a strong strategic narrative must not override it.

Distinguish evidence from a favorable answer

For each target and criterion, record whether the condition is met, failed, or unknown, together with the finding, evidence basis, and review date. Separate assumptions and seller claims from evidence the team has verified.

“Meets” describes an assessment. It does not establish the quality of the evidence behind it. Missing, conflicting, or unverified information should produce a specific investigation task, not an assumed pass.

The workbook checks the entered records for completeness and consistency. It cannot inspect a contract, validate a management statement, or establish that a document supports the conclusion. Those judgments remain with the reviewer. Replace the fictional example assumptions with the target’s evidence before relying on the result.

The Screen tab compares the criterion basis previously reviewed with the current definition and evidence test. A changed required criterion reopens the assessment. Reassess the evidence before copying the current basis into the reviewed-basis field as values. Changing that field alone does not establish that the new requirement is met.

Use priority to allocate attention

The review order reflects the team’s entered priorities. It is an ordering of work, not a probability of closing or an estimated financial return. Use the fit rationale to explain why a target deserves attention ahead of another.

Keep the review queue distinct from the eligible shortlist. A high-priority target with an unresolved control question may deserve urgent investigation while remaining ineligible to advance. A failed requirement belongs in the pass or rework discussion, regardless of its position in the queue.

Give each active target an owner and a concrete next action. For a pass, preserve the reason. The record should explain whether the issue was strategic fit, economics, timing, ownership, transferability, or missing evidence—and what, if anything, would justify reopening the target.

Your first 15 minutes

Define the need. State the capability or market gap and the result the buyer needs.
Set the boundaries. Enter the capital envelope, time available, sponsor, decision authority, and required criteria.
Compare the routes. Explain what build, buy, partner, and do nothing would each deliver. Record the preferred route and why.
Start with one target. Give the first target a stable ID, fit rationale, initial priority, owner, and next action. Capture the ownership and seller questions immediately.
Test the requirements. Start its target–criterion evidence rows, marking missing information as unknown. Review missing information and failed gates before using the shortlist.

Version 1.0 provides twelve target slots and six screening criteria. Monetary entries use USD millions; timing uses months unless a field explicitly requests a date. Keep zeros distinct from unknown amounts. Follow the Guide tab when replacing examples, sorting rows, or revising the mandate.

Mike’s governing judgment

Frame before detail. The target must serve the mandate; the mandate should not be rewritten merely to accommodate a target the buyer likes.

Underwrite rather than admire. Growth and seller narrative need support from the business’s durable economics and transferable capabilities. Unknowns are findings because they identify what must be learned before the next commitment.

Distinguish a fatal condition from risks that can be investigated, priced, or protected. Keep the capital discipline and the willingness to walk intact. A search that produces a well-supported pass can protect more value than a search that produces a transaction at any cost.

Common mistakes

Starting with a favored target and adapting the mandate to make it fit.
Comparing an acquisition price with the full cost of building a capability.
Assuming a seller contact can deliver the required control.
Calling a seller claim verified because it appears in a presentation.
Allowing a high review priority to cancel a failed requirement.
Keeping a target cleared after changing the criteria or capital envelope.
Recording a pass without explaining the reason or reopening condition.
Treating mandate approval as permission to bid, sign, or contact the seller.

What the screen establishes

The output records the mandate, alternatives, review priorities, entered evidence, and conditions that determine the target’s screening status. It creates a common basis for allocating the team’s next increment of work.

It does not establish fair value, financing capacity, downside survivability, legal transferability, or transaction approval. The capital and timing comparisons are early screens using the entered estimates. They do not replace a valuation, funds-flow schedule, operating model, or diligence process.

Mandate approval is separate from target clearance, permission to contact a seller, and approval to bid or sign. Revisit the mandate and its approval when the business need, scope, assumptions, or required criteria change.

After a material change to the business need, selected route, capital envelope, funding horizon, or other mandate assumptions, increment the mandate revision. Reassess target and criterion records and renew the approval against that revision. The workbook flags mismatched recorded revisions; it does not automatically increment the revision for every edit. This revision step is part of the operating discipline.

Carry the shortlist into underwriting

Move the approved shortlist into the Acquisition Target Pipeline & Deal Funnel. Keep the mandate revision, stable target IDs, evidence, owners, next actions, and pass reasons visible as opportunities move through the process.

Take the unresolved assumptions into Before You Buy: Follow the Work. Evaluate buyer-created benefits separately with the Synergy Underwriting & Value Bridge. When terms begin to take shape, use the LOI Economics & Risk Allocator to test what the structure does to consideration, funding, and risk.

Keep the original thesis and pass rationale. They provide the reference point for later diligence, negotiation, and post-deal review.

Version

Version 1.0. Updated September 10, 2026. Editable Excel workbook with a mandate, alternatives comparison, target screen, evidence records, and a ranked review view. Entries stay in your downloaded copy.