10 Rules for Successful Mergers and Acquisitions
Mergers and Acquisitions, if carefully planned and executed, can deliver immense growth to a business venture. However, realizing the potential value of the M&A and the potential pitfalls is always challenging. Are you considering an M&A soon? If the answer is yes, then we will discuss 10 essential rules to help you be successful in your M&A transactions:
1.Build the Right Team
The process of M&A is essentially a teamwork effort. Even if you make a mistake during the process, having a good team will ensure that you have an exit route ready. Each of your departments- tax, finance, R&D, marketing, manufacturing, and HR, play an important part in the process. Their due diligence during the planning ensures that everything goes smoothly. So, make sure that you select your team carefully and engage the right people in helping you with the process.
2.Set Realistic Expectations
During the process, you will be dealing with a number of stakeholders. So, it is important to have a realistic perspective of the pace and goals of the process. Consider the demands that might arise during the process. Talk with your team members and discuss the time between the letter of intent and close date of the transaction. Also, consider all possible outcomes that might arise during negotiations.
3.Integrating the Business
Always have a plan for how you are going to integrate the two businesses. If you consider the options, in the beginning, you’ll get a clear picture of the problems that you might face. You’ll also understand the nature of demands that might arise.
4.Know your Business Goals
Understand the business goals of your organization and the ones specified in the transaction. A good understanding of your goals can make the process run smoothley while handling any issues that arise.
5.Appropriate Risk Management
There are risks involved in the process of M&A. Set your expectation appropriately early in the process and know when to pull the plug on the deal if things begin to unravel.
6.Commit to a Culture
Every organization has its own unique of culture. During M&A, manage the company culture uniformly. Design a structure that is consistent with the desired company culture. Carefully consider the people who support and do not support the new culture. This will help you make decisions regarding which people to keep.
7.Deal with Uncertainties
M&A might make employees anxious and nervous about their future. It is important that you communicate with them early and often . Concentrate on what the deal means for the future of your people.
8.Focus on the Base Business
Do not get distracted with the process. Give yourself time to work through problems and focus on existing clients during the integration process.
9.Consider Quality, not just Quantity
Focus on how the deal can create added value. If required, consult with external advisers. This is not just any random process. So take your time to understand the process and seek expert advice when needed
10.Review the Process
Once the process is over, review it. Consider how it worked and where you must focus. Take notes so that next time you can move faster and in a more efficient and effective way.
We hope these pointers will help you understand how to effectively negotiate during a merger and acquisition. If you are looking for M&A advisory firms, then get in touch with us. With our extensive industry experience, we can help you assess all the risk factors to insure a smooth process. Give us a call at (800) 913-5467.