Things Your M&A Advisor Wants You To Know Before Considering A Merger Or Acquisition

In the business world, mergers and acquisitions are pretty commonplace. However, for those who are still learning how to navigate this professional environment, facing a potential merger or acquiring another company for the first time can be daunting. There are many factors that must be considered and elements that you need to address. Here's a look at some of the things that your mergers and acquisitions advisor may tell you before you make a decision and sign that contract.

Look Beyond The Revenue Numbers

When it comes to deciding if a merger or acquisition is the right decision, the financial aspect of the deal is a serious consideration. It needs to make financial sense before you actually pursue it. However, financial viability isn't the only factor that you should be thinking about. There's much more to determining whether or not a company is a good fit for a merger or acquisition with your business.

For example, consider the brand identity and the company's general public perception. Do their reputation and identity blend well with what you've established for your company? Remember that any company you acquire or merge with is going to be a reflection on your business, so look at the big picture from a brand and company culture aspect as well.

Know Your Non-Negotiables

Mergers and acquisitions are negotiations. The entire process involves determining who will get what from the deal. Start by clearly defining both what you're bringing to the table and what you need to get out of the deal.

For example, you may be bringing worldwide distribution access to a smaller business that was historically only local. They, in turn, may be providing you with a whole new product line to offer your customers, allowing you to expand your sales and your customer base.

However, you don't want to compromise on something that's vital to your company's existing infrastructure and corporate culture. Know what's important to your company in the deal, understand what you can't compromise on, and be ready to walk away if need be. Working with a mergers and acquisitions advisor can help you to stand by this.

Clearly Define Roles And Requirements

Any time you're merging two businesses, you'll have to re-define the roles and requirements for everyone involved. Positions will change, the hierarchy of the business may be altered, and expectations need to be clearly laid out so that everyone knows how to meet the benchmarks established for them.

Take the time to evaluate the entire infrastructure of both businesses and determine the best way to distribute responsibilities and roles across both. It's important that you establish all of this before the contract signing so that you can enter into the agreement with a clear path forward.

Talk with an M&A advisor today for more guidance before you start considering mergers and acquisitions for your business.



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