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Common Mistakes Companies Make During M&A

According to an article published in Forbes, mergers and acquisitions (M&A) have only 50% chances of success.
Source:

http://www.forbes.com/sites/forbesleadershipforum/2012/03/19/why-half-of-all-ma-deals-fail-and-what-you-can-do-about-it/#5e3c699f20ae

Even in a healthy acquisition environment, 100% success isn’t definite. Companies face strategic problems which include proper alignment of employee interests for both the companies, proper due diligence and so on.

Here we discuss 4 common mistakes that companies usually commit during M&A:

1. Proper Planning

Without meticulous planning it’s not possible to complete the transaction successfully. You need to think about multiple factors before signing the deal. Companies have different work cultures. Have you identified whether your company culture matches with the target company or not. Consider whether the deal aligns with your company strategy or not. Is the deal really worth taking the risks? If yes, then what makes it a better choice than other target companies?

2. Failure to Hire Efficient M&A Consultants

Before making any move, hiring an experienced and successful M&A consulting firm is important. Experienced firms are aware of the industry trends and know complex processes of M&A inside out. The financial implications of a bad deal can be severe. By hiring a good M&A consultant, companies can sort out complex issues which if not resolved at early stages can later pose serious challenges. If you are looking for competent mergers and acquisitions consultants, then get in touch with us. At Linq Partners, we offer innovative solutions to simplify complex business challenges and ensure success at every stage of the deal. Call us today at 800-913-5467.

3. Not Too Many Bidders

From a seller’s perspective, a best deal can only happen when there are multiple potential bidders. The company can leverage the competitive scenario and get a better deal. Negotiating with only one bidder binds the company to the demands of the bidder. Multiple bidders help in better negotiations. Set up an auction or a bidding process where multiple bidders can participate.

4. Not having a good virtual data room

A virtual data room holds all the important information that a bidder might want to review. This includes financial statements, contracts, and employee information. This helps the buyers to complete the due diligence in a fast and effective way. It also helps the company prepare a disclosure schedule, an important document required in the M&A process. An effective review ensures there are no hurdles afterwards.

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