Implementing acquisitions and business mergers are exceptionally involved, and one must dot all i’s and cross all t’s in order to be reasonably certain of success. It is an endeavor that requires a things as esoteric as company culture, valuation assessments and maintaining momentum through the entirety of the process. Here are ten steps that are guaranteed to facilitate the difficult task of bringing companies together into one.
Assess the Company Structures: This is precisely what it says. You need to have an understanding of how each company is structured, in order to see what can be merged, and what has to be discarded or changed.
Choose the Leadership: Oftentimes, the leadership structure, itself, will need to be altered to better suit the new vision for the merged company. If a corporation, then the Board of Directors will need to be involved with the selection.
Rectify the Company Culture: Although this aspect is difficult to enumerate – it is just as important as any of the others. Company cultures are similar to family dynamics, and disrupting them will lead to big inefficiencies.
Hire a Company Branding Professional: This is the most efficient way to conjure an effective new brand that reflects the company that results from the business merger. Consult with the Board of Directors first.
Conduct an Analysis of Financial Positions: To perform this task optimally, it is best that you hire a tax consultant to back up the work done by the financial authorities of either business pre-merger. There could otherwise be some noteworthy gains/losses as a result of the merger.
Assess Total Operating Costs: Start with cash flow; a comprehensive appraisal of the balance sheets of the merging business is imperative to avoid serious cost overruns.
How Much is Each Company Worth? When it comes to business mergers, certifying the transfer of ownership shares is imperative; all shares have to be apportioned correctly since businesses have different values pre-merger.
Uphold Transparency During the Process: Your employees may not be on the Board of directors, but they should be apprised of important information throughout the merger process. Sudden changes can leave people unprepared.
Due Diligence in Assessments: This is particularly important in taking account of all liabilities before the merger proceeds. This includes discovery, basically, so that you are not surprised by legal injunctions, liens, or unrevealed debt.
Keep Focus: As mentioned at the start, business mergers and acquisitions are characteristically difficult, and becoming lost in the details can rob you of momentum. Keep your eyes on the end result, and then look to establish goals for employees and management so that business can return fully as soon as possible.
Although the above is intended to be a comprehensive, point-by-point assessment of what’s necessary to complete business mergers, it is not meant to be a deep dive. It will, however, give you a solid foundation of how to proceed.
If you need financing to ensure a successful business merger or acquisition, contact the team at Fortis Funding today.