In the financial press, articles about mergers and acquisitions in SMEs and large corporations are published each day. While increasing revenue and getting exposure to new customers are typically the primary reasons for a deal for a merger, it is imperative that any business seeking to enter the M&A game has a well-thought out strategy for ensuring success of a deal.
A successful M&A is a complicated process, and the final result depends on many aspects that onlinedataroom.blog/how-a-secure-file-sharing-platform-can-improve-your-business-operations both parties must take into consideration. A high-quality management group is essential to ensure that your business can effectively navigate the M&A process. A trusted external consultant and accountants to help in this process could improve the overall credibility of your M&A strategy.
The first step in the process is to perform an extensive financial health assessment on your company. This includes analyzing profit and loss statements and cash flow, analyzing the equity and debt of the company, and determining if you have enough liquidity to pursue an M&A transaction. The financial health check will uncover any ambiguities between your Management Accounts and Statutory filed accounts, which could cause confusion for a buyer.
Another crucial aspect is to take into consideration the costs of integrating both companies. It can be physical costs such as merging offices, systems, and employees or human capital costs such as calculating the cost of compensation and benefits programs. Involving experts in human capital early in the process will enable you to evaluate these costs and incorporate them into the price negotiations for your purchase.