Mergers refer to two companies joining hands in order to become one company, whereas an acquisition is when a company altogether is acquired by another company. It’s normally performed for market expansion, to minimize operational costs and increase profits.
The processes are fairly lengthy as they require a high level of consideration with regard to feasibility. It goes as follows:
Strategize and Search
The first part of any successful mergers and acquisition plan is to determine the move’s core purpose. What does a company expect to achieve out of this? How will it help them out as a company, concerning their finances as well as market shares? Will it allow you to acquire a competitor or step into an entirely new market?
The answers to these questions will help you formulate the kind of company you will be dealing with and simplifying your search process. With a profile set for the kind of business you need, you can look around the market for a company that fits that criteria.
Diligence and Valuation
Once a company has sent in a Letter of Intent to another business for merger or acquisition, it’s imperative the two sign NDAs to discuss confidential information. It will allow them to share trade secrets and financial details, which can help the buyer decide whether to discontinue or before proceeding towards the negotiation phase.
The buyer also receives the information they require for proper valuation of the business before acquisition and negotiations, which can help them start smoothly in the negotiation phase before they sign a deal.
The Transition Phase
Preparing for the transition phase is equally important. You will be required to prepare sales contracts and look into the legal requirements relevant to the new business before integrating with your business. Proper teams have to be set up to lead the charge for the new venture, which may or may not require hiring new people. When you’re acquiring a competitor, you may also have to consider non-competitive strategies. Once all of these are sorted and finalized, the integration can begin.
Gulfstream Mergers and Acquisitions has been in the mergers and acquisitions business since 1993, helping hundreds of businesses with buying and selling their ventures. To find the best buyers or business for M&A in the market, you will need a business broker to assist you.
We’ll counsel you throughout the entire process, starting off with scouting the market for the business you’re looking, preparing the NDA, evaluating market values for both parties and helping negotiate the deal. We’re serving in New Jersey, South Carolina, North Carolina, Florida, Alabama, West Virginia, Pennsylvania, Tennessee, Georgia or Ohio; reach out to us right away.