In the financial press, stories about mergers and acquisitions in SMEs and large corporations are published every day. While increasing revenue or getting exposure to a brand new client base are typically the primary reasons for companies to enter into M&A It is vital to develop a thorough strategy to ensure success.
A successful M&A involves a complex procedure and the final outcome is onlinedataroom.blog/how-a-secure-file-sharing-platform-can-improve-your-business-operations contingent upon a myriad of factors that have to be considered by both parties. It is essential to have a top-quality management team in place to ensure that your business is able to successfully navigate the M&A process and create value. External consultants and accountants can help you establish credibility for your M&A strategy when you solicit their help.
The first step is to perform an in-depth financial health check of your company. This includes reviewing the statements of profit and loss, assessing cash flow, analyzing debt/equity ratios, and to determine if you have the funds to pursue an M&A deal. The financial health check will uncover any ambiguities between your Management Accounts and Statutory filed accounts, which could cause confusion for a buyer.
Another important factor is to think about the costs of integrating both businesses. This can include physical costs, such as merging systems, offices and employees. It could be in terms of human capital costs, such as the calculation of the costs of compensation and benefit programs. By involving experts in human capital early in the process, you will be able to be able to accurately evaluate these costs and include them in the negotiations on price for purchases.