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Six Tips For A Better M&A Process

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Managers and leaders would be in agreement that a merger and acquisition (M&A) deal can result in a lot of opportunity and success or even failure. As such, when there is pressure to negotiate a fruitful M&A, which areas should be prioritized?  Below are six tips for a better M&A process that can be used to navigate:

  1. Know Precisely What You Would Like to Achieve

Each business owner has his or her personal motive for wanting an M&A.  Therefore, prior to talking to prospective partners, you should paint a clear picture of the look of the combined business.  When an M&A is treated like setting any other goal, you will save yourself lots of energy and time later on.

With a clear picture of your M&A expectations in mind, the process will be easier to negotiate as well.  This will enable you to state your objectives confidently and you will also be able to speedily cross off prospective partners who have different objectives.

  1. Start with Bringing in the Right Individuals 

Are you the principal owner and CEO of your business who can make decisions about anything on the spot? Or are major decisions made by a board of directors as a part of a family-owned business? There are different leadership structures and power dynamics for different companies.

If you have an interest in a specific M&A, it is up to you to know the key decision-makers in the organization and ensure they are included from the start.  Many M&A deals have reached as far as the last contract negotiations, only for everything to go wrong because a primary decision maker had been excluded from discussions.

  1. Make Sure Your Homework is Done

You do not want to be surprised following the signing of an M&A deal. A pending lawsuit or overlooked debt obligation can totally change whether an M&A will succeed or fail.  And while everyone at the negotiating table should be open and honest regarding the positive and negative features of their companies.  Therefore, do your due diligence.

  1. The Key is Communication 

Pulling off a successful M&A involves building strong relationships and communication is integral to relationship building. Everyone in the company will be impacted by the M&A, so remember to keep all stakeholders informed.  It is likely staff members will feel the most anxious and feel like they are in the dark. Communicating with everyone can enhance employee motivation and prevent misinformation from spreading.

  1. Culture Matters 

A successful M&A involves a commitment to improving at least two companies by combining people and other resources. Success involves being an effective team leader.  As a good leader, it is your job to convince everyone that this change will result in positive changes for everyone involved.

  1. Know When to Walk Away

Knowing when to walk away is among the most vital skills to learn while negotiating a deal. No M&A deal is perfect and you have to be willing to compromise on a few. However, you should go to the negotiating table knowing precisely what the deal breakers are as well.  Do not be afraid of adhering to the terms of your deal breaker. Additionally, you should not be fearful of walking away when the other company is unwilling or unable to accept those terms and share the values of the organization.

MergersCorp M&A International is a prominent and experienced global advisory firm. It offers professional merger and acquisition advisory services to its global clients that want to buy or sell businesses. Their interests are protected in the deal with its professional support services. This team of M&A advisors, investment bankers, and brokers help companies with $500,000 – $250 million annual revenues. You can visit MergersCorp.com for further information.

Robert G. Cotitta
Robert G. Cotitta
Robert G. Cotitta
Robert G. Cotitta, President of Bancorp I, Inc. has over 40 years of experience in the banking industry in ownership, management, and consulting positions.

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