Mergers and acquisitions can help you to create a stronger, more valuable business if your strategy is sound. When considering M&A, make sure you’re ready–and that you’re making the wisest move.
Keep these factors in mind before you take action:
- Ensure liquidity: Be certain that you’re financially prepared to acquire the other company.
- Strengthen team: Make sure you have the experience needed to manage this new business, or that you can convince key managers (of the acquired company) to stay on.
- Define business goals: Will this acquisition take you closer to your future objectives? Is your goal to expand your market share or eliminate the competition with your purchase? Are you after new lines of business, or do you want to grow in your current sector? Will your purchase make your combined company more efficient or reduce costs? Use your defined goals to guide you to fruitful acquisitions.
- List potential targets: Don’t leap before you look. M&A opportunities should be relatively easy to integrate into your current business and you should have a realistic plan to do so. Consider whether the new, combined organization will be financially feasible and viable. How will you overcome anticipated challenges when melding the two companies.
- Evaluate candidates for acquisition: Perform careful due diligence to ensure the candidate company is what you think it is. Examine all aspects, including finances, operations, tech infrastructure, key staff backgrounds and expertise, legal issues, the rights to, and value of, IP (intellectual property), customer base and more.
- Create a transition strategy: Get your ducks in a row, with detailed pre-planning, to ensure a smooth merger. Leaders of both companies should work together to combine and streamline operations.
- Integrate to form the new company: Bring the new acquisition fully on board, eliminating redundancies and securing key staff members, so that they see and believe in the new, combined company vision. Make sure each valuable staff member is clear about their role and accountabilities, and that they feel secure and excited enough to help the new company succeed.
Contact Rotay Capital Finance for your business acquisition funding needs.