Every every day, there is a story in the financial press about merger and acquisition transactions in SMEs and large corporations. While increasing revenue or getting exposure to a new customer base are usually the primary motives for businesses to go into M&A however, it is crucial that they develop a well-thought out plan to ensure the success of the deal.
A successful M&A involves a complex procedure and the final result is contingent upon a myriad of factors which must be taken into account by both parties. A well-run management team is crucial to ensuring that your company is able to successfully navigate through the M&A process. External consultants and accountants can help you establish credibility for your M&A strategy if you seek their help.
The first step is to conduct an in-depth review of the financial health of your company. This involves looking at the profit and loss statements as well as cash flow, analyzing debt/equity and determining whether you have enough cash flow to pursue a M&A transaction. The financial health check will highlight any discrepancies between your Management Accounts and Statutory filed accounts, which can create confusion for a buyer.
Another important aspect is to take into consideration onlinedataroom.blog/how-a-secure-file-sharing-platform-can-improve-your-business-operations the costs of integrating both companies. It can be physical costs like merging offices, systems and employees, or it could be human capital costs like calculating the cost of compensation and benefits programs. Getting human capital experts involved early in the process can enable you to evaluate these costs and build them into your price negotiations for purchases.