How To Make Your Merger or Acquisition a Success: Mergers and acquisitions are not easy. They require a deep dive into the histories of the companies involved and a full vetting of the individuals taking part in the process. It’s a rigorous procedure and many things have to go right to make such a deal successful.
Here are a few tips to make your merger or acquisition go as smoothly as possible.
Get to Know Your Potential Partners
You have to know your new partners on more than just a superficial level. According to Forbes magazine, you should do background checks and require references. And talk to the employees involved; they often have a deep understanding of the business and how it’s running.
Talk to Current Clients
If you can, find and read customer reviews to learn all you can about the company. A customer’s attitude about a company, good or bad, is a good way to tell how the company is performing.
Get Outside Help, If Necessary
Jonathon Karelse of North Find Partners notes that the demands of today’s business environment often require the application of advanced expertise. Yet many organizations come up short in this area. Some don’t have the in-house expertise to drill down through the details and perform a comprehensive evaluation of the business. Others are better off focusing on their core competencies, conducting business as usual while an outside consultant takes care of analysis and other core M&A procedures.
Evaluate the Strategic Fit
Not all companies are meant to join forces. Take a look at your prospective partner’s books and get your financial experts to do the same. Go back at least five years and look for inconsistencies. If there are too many, the deal might have to be put on hold while you sort things out.
Get the Best Leadership Team You Can
According to Entrepreneur magazine, almost every company has three divisions: finance, sales and marketing, and operations. So it makes sense to pull together a pool of experts that represent these areas of expertise. Depending on the situation, you may also need to bring in legal counsel, valuation experts, investment bankers and accountants.
Keep in mind that not matter how much you prepare, the transition will be difficult, because people generally don’t like change. But by following the steps above and adding a few of your one, you can succeed in the challenging world of M&A, putting together a new company to gain new customers, boost productivity and penetrate new markets. And it’s going to take time. Never underestimate how long it will take to absorb a new company, changing the way things operate, or successfully merging the best of both companies, the ultimate goal of most M&As.
