Every business, no matter what industry, sector, or service is different and has its own unique ethos. Every acquisition is different and comes with a varied set of challenges. However, the aim should for the two merging companies to understand, acknowledge and respect each other. They should be aiming to achieve the same strategic and financial goal.
With so many potential structures in the world, a business must form an alliance if it is to enter the market with a powerful image and product service. Companies are less likely to sell their business, if, even one box on their criteria list is not ticked. The amount of staff, investors, distributors, manufacturers and industry contacts are just some of the things a CEO will enquire about when looking to buy and merge their business with another. Equally important are the practical solutions such as supply and demand. Although this is dependent on the mood of the global economy, there are certain codes of conduct you can follow to get the best out of an acquisition.
Image credit – highwaysengland
Get the facts
Are you getting what is being offered on the table? If you’re pursuing a company that you’d like to merge with, contacts and relationships will form a picture of what’s true and what’s merely speculation. Business owners may not want to show the internal components of their company because should a deal fall through, valuable information about their capabilities and aims can be leaked and countered by a competitor. Therefore to evaluate another business, ask to see their quarterly reports and study the projected figures or profit, revenue, scale and customer concerns to see if they have met their own expectations. The question whether the deal includes third-parties who may be retained as part of the deal such as freelancers and marketing staff.
Photo source – U.S. Army Corps of Engineering
A targeted search
The true size of a business is a number of people who work in it. However, the employees need the proper means and production capacity to undertake their jobs to the fullest effect. You as the owner and your advisors must decide whether you want an investment banker to budget your expansion, and find and evaluate buildings and industrial complexes that would satisfy the need, or employ an industrial real estate professional for the same task. Specialists will cater to your logistical requirements but keep with the law of the land also such as environmental due diligence. They will complete on-site assessments as well as audits, so proper adherence to standards is kept. Liabilities, testing of the soil, water and air pollution will be examined and researched to give you a broader picture of what the industrial capabilities of the site you’re going to use to grow your business.
A contingency plan
Although nobody expects to break an agreement, but as you’re dealing with people who you’re not familiar with personally, therefore, you don’t know their temperament, it’s good to have a safety net. Much like a prenuptial agreement, it’ advisable that you don’t relinquish or shut down your original business even after the merger. Ensuring a continued existence, should the other party renege on its obligations, your business will live on nonetheless. Contemplate parallel operations for a period of time before all the eggs have hatched, and the merger is signed, sealed and delivered.