4 Ways to Ensure You Secure a Sound M&A Deal for Your Business

Posted on: February 9th, 2017

Are you thinking about merging or acquiring another business? With the economic prospects looking up, it is the right time to think about acquiring a competitor or making a tactical acquisition. However, M&A’s include a lot more than just a financial transaction.

You will have to think about everything from developing an integrated leadership to planning a new sales and marketing approach. In short, a merger or acquisition is a lot of hard work.

Here are 4 ways to ensure that you secure a sound M&A deal for your business.

1. Define your goals and success factors
Your future objectives, namely your goals and success factors, should direct the path of your M&A strategy.

Ask yourself where you want to go and what you value most. Do you wish to increase your market share? Or do you want to acquire new products or processes? Or are you interested in exploring new markets?

Your merger or acquisition should bridge the gap between your company’s current state and the future state you desire via your goals.

2. Plan and execute due diligence
The importance of proper due diligence cannot be stressed enough. A thorough due diligence should encompasses financial, operational, legal, technology and people due diligence.

Furthermore, the due diligence should test the strategic fit of the merger or acquisition as well.

3. Create a transition team
Whether it is a merger or acquisition, strong leadership is pivotal to steering the company into a successful new future.

Create a strong transition steering committee, which should function as a team and include line managers who are close to the action, and leaders from both sides of the acquisition.

The team should also have a well-defined work plan, which has to be reviewed constantly as conditions change.

4. Carefully plan and perform the integration
This vital stage sets the success of the deal in motion. As you merge the operations, processes and cultures of the two companies, be sure to constantly evaluate and modify what is working and what is not.

Furthermore, speed is also critical at this stage, as delay can cause failure and may cost you key people.

Often mergers or acquisitions fail due to a poor strategic fit, bad integration or inadequate due diligence.

Following the above four crucial steps can help you avoid failure in your M&A deal. Questions or comments? Please email me at [email protected] or visit www.attractcapital.com.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.