How to buy a company abroad?

Buying a company abroad is one of the strategies that entrepreneurs and investors can use to significantly accelerate the growth of their business. Why embark on a cross-border acquisition? Acquiring a foreign company allows for quick entry into new markets and access to an established customer base, which is faster than building a branch from scratch. A foreign acquisition also opens the door to new technologies, know-how and talent that may not be available at home. Last but not least, it's about diversifying risk and revenue - operating in multiple countries helps to smooth out the fluctuations of individual economies. In short, buying a company abroad can bring new opportunities, competitive advantage and global scaling of a business that would otherwise take years of effort.

Author of article: ARROWS (Jakub Dohnal, JUDr. Jakub Dohnal, Ph.D., LL.M., office@arws.cz, +420 245 007 740)

Challenges and risks

However, foreign acquisitions are not without obstacles. Specific challenges must be prepared for before taking the first step:

• Cultural and linguistic differences: each country has different business practices, work culture and negotiation styles. Language barriers and different business environments can cause misunderstandings and slow down integration.

• Legal and regulatory differences: Each country has its own laws for M&A, including restrictions on foreign investors, antitrust rules or requirements for approval by authorities. Navigating the laws and tax rules of a foreign country is complex, and ignorance can lead to fines or thwarted deals.

• Financial and economic risks: currency exchange rates, the political stability of the country and the economic situation of the market come into play when buying a business in another country. Fluctuations in exchange rates or unexpected economic changes can affect the value of the investment.

• Lack of local contacts: Without local knowledge of the market, it is difficult to find suitable acquisition targets and check their reputation. Often it is necessary to rely on expensive intermediaries or consultants who have contacts in the region.

• Post-acquisition integration: Merging teams, processes and systems across countries can be challenging. Different corporate cultures and practices can jeopardise planned synergies if not properly managed.

However, these obstacles do not mean that a foreign acquisition will not pay off. On the contrary - with good preparation and the right partners, these risks can be minimised. The key is to have experts on hand with experience in the target country and to thoroughly execute each stage of the transaction.

How ARROWS INTERNATIONAL helps

The traditional process for buying a foreign company often involves hiring several different advisory firms - from investment bankers to local lawyers to cultural differences consultants. This makes the whole process more expensive and slower. ARROWS INTERNATIONAL has come up with a more efficient and affordable solution that eliminates these drawbacks. Thanks to its own international network and technological innovations, ARROWS can provide everything needed "under one roof".

• Global network and direct contacts. This means that for a particular country, it has direct access to proven local experts - lawyers, financial advisors and market experts. When you decide to buy a company in Germany or the USA, for example, ARROWS activates its local partners who know the environment and have personal contacts with relevant companies and institutions. This eliminates lengthy intermediate steps - you don't have to look for a separate law firm abroad or pay an expensive intermediary with unclear results. Direct access to information and people shortens the path to closing a deal.

• Leveraging AI: In addition to a human network, ARROWS INTERNATIONAL also harnesses the power of AI (artificial intelligence) to accelerate and refine the acquisition process. Modern tools can search vast amounts of data on companies around the world and identify suitable acquisition targets according to the criteria you specify (industry, size, financial health, etc.). AI also helps with financial statement analysis, due diligence documents and risk analysis, saving professionals time and minimizing the risk of human error. For example, legal analysis of contracts or checking compliance with regulatory requirements can be much faster thanks to smart algorithms. Overall, this speeds up the process significantly - tasks that would have taken weeks can be completed in days.

• Lower costs and fewer redundant advisers: a direct international network and AI automation mean that there is no need to pay a number of separate advisers. ARROWS INTERNATIONAL coordinates the entire acquisition project internally with its partners, so the client does not pay margins to multiple middlemen. By centralizing services and leveraging technology, overall costs are lower, often by tens of percent compared to the traditional process. At the same time, communication is simpler - the client deals with one coordinator in ARROWS (in their own language) instead of having to communicate complexly with lawyers and advisors in different countries separately. This simplicity and transparency also eliminates the risk of information getting lost in translation or advisors working with different visions.

In other words, ARROWS INTERNATIONAL combines the best of human know-how and artificial intelligence. This provides clients with a faster and smoother acquisition process, saving them money and avoiding unnecessary complications. Instead of a complex consulting "puzzle", you have one experienced partner looking after all the pieces for you.

A practical acquisition process

So how does the purchase of a company abroad proceed step by step? Below is an overview of the main stages of the acquisition process and the key tasks in each step. Having a clear plan from the start will help avoid omissions - and with a partner like ARROWS INTERNATIONAL, you'll be sure not to skip any step.

1. Defining strategy and goals

First, be clear about what you want to achieve with the acquisition. Is it to enter a specific market, acquire technology, expand capacity, or perhaps eliminate a competitor? Determine the criteria for selecting a target company - field of operation, size (sales, number of employees), preferred location, budget for investment, etc. Careful preparation of the strategy will allow you to target the right candidates and not waste time with inappropriate opportunities.

2. Finding the right company (market screening)

With clear criteria, the search for potential targets begins. Public databases, industry contacts, chambers of commerce or specialised platforms can be used. This is where ARROWS INTERNATIONAL can help significantly - thanks to its global network and AI, it can quickly pinpoint companies for sale or investment anywhere in the world that match your requirements. Local partners will verify the reputation and background information of the selected companies. The output of this phase is a list of prospective candidates for acquisition.

3. First contact and preliminary discussions

Once you have identified a specific company, the next step is to approach the owners of the target company. This usually involves signing a non-disclosure agreement (NDA) and an initial meeting or video conference to express your interest in the purchase. The goal is to get the owners to agree to further negotiations and access to more detailed information. At this stage, a non-binding offer or term sheet (Letter of Intent, LOI) is also often signed to outline the framework terms of the transaction - preliminary price, deal structure, exclusivity of negotiations, etc. With the support of ARROWS, these negotiations can take place efficiently - thanks to direct contacts, ARROWS can often arrange a meeting with the owners more quickly and help bridge language or cultural differences during negotiations.

4. Due Diligence

If both parties agree on the basic contours of the deal, then comes the thorough due diligence of the target company - financial, legal, tax and operational. The aim of due diligence is to uncover all potential risks: the state of the business, hidden debts, litigation, validity of contracts, state of assets, intellectual property, market position, quality of management, etc. This phase is critical to confirm (or adjust) the price offered. ARROWS INTERNATIONAL coordinates teams of experts in the target country who are familiar with local legislation and conditions - ensuring that nothing essential is missed. By using AI tools, ARROWS can process large volumes of documents more quickly, so the vetting process doesn't take longer than necessary. At the end of the due diligence, you'll receive a report on the state of the company and any risks, based on which you can decide to proceed or adjust terms.

5. Structuring and financing the transaction

In parallel with the due diligence, the structure of the acquisition and the method of financing are fine-tuned. The decision is made whether to buy 100% of the shares or only a part, or whether to buy the assets of the company (asset deal) or the shares (share deal). It is also decided how to pay for the transaction - from own resources, bank loan, investor or a combination. In cross-border deals, tax considerations also play into the structuring (e.g. whether it is more advantageous to buy the company directly or through a foreign holding company). At this stage, ARROWS INTERNATIONAL provides its legal and tax experts to suggest the optimal course of action from the perspective of the legislation of both countries. Setting up the transaction correctly can save on taxes and avoid complications during the transfer of the company.

6. Negotiating the contract and closing the deal

Once due diligence is completed and the structure and price agreed, the final Share Purchase Agreement (SPA) or other agreement depending on the type of acquisition is drafted. This agreement will detail the subject matter of the purchase, the price, the mechanisms for price adjustments (e.g. based on financial statements), warranties and representations by the seller, penalties for breach, termination terms, etc. Contract negotiations can be intense - each party wants to maximize its security. Experienced ARROWS lawyers in the target country will ensure that the contract complies with local law while protecting your interests. Once the final text has been agreed, closing, i.e. signing the contract and settling the transaction, follows: the buyer pays the agreed amount and the shares or assets of the company are transferred to the new owner. This formally completes the acquisition.

7. Integration and further steps after the purchase

The work does not end with the conclusion of the agreement - now it is essential to successfully integrate the purchased company. Processes need to be aligned, teams need to be unified, management needs to be renewed if necessary, IT systems need to be connected, and the new strategy needs to be presented to employees and customers. A well-managed integration will determine whether the expected benefits of the acquisition (synergies, revenue growth, cost savings) are realised. Already during the previous steps it is advisable to have a basic integration plan. ARROWS INTERNATIONAL can continue to advise at this stage - for example on employment issues when merging teams in different countries or harmonising contracts and processes. The goal is to have the newly acquired foreign branch operating smoothly as part of your business as soon as possible.

Don't worry, we can help

Acquiring a company abroad is one way for ambitious entrepreneurs and investors to get a head start in a globalised world. It brings huge potential for growth, innovation and expansion, but also places high demands on expertise and coordination. As we have shown in this case study, the key to success is having reliable partners and tools to facilitate the process. ARROWS INTERNATIONAL offers a modern approach to international acquisitions that combines a top team in 90 countries, direct local contacts and advanced AI. As a result, it can ensure faster deal flow, lower costs and smooth execution - factors that traditional methods simply cannot guarantee to the same extent.

So if you're considering buying a company abroad and don't want to waste time or money on a lengthy traditional process, take the first step with ARROWS INTERNATIONAL. Simply contact their team and discuss your intentions in a non-committal manner - ARROWS experts will analyze your needs and show you specific acquisition opportunities anywhere in the world. Take advantage of the more efficient and cost-effective solutions ARROWS offers and turn your plans into reality. Your global opportunity awaits - with ARROWS INTERNATIONAL, you can seize it with confidence and ahead of the competition.