A Simple Guide to the Mergers and Acquisitions Process

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This year has been a record-breaking one for mergers and acquisitions. As of June 2021, M&A activity passed the $2 trillion mark — an increase of 158 percent from the same point last year. 

Perhaps you’ve heard that mergers and acquisitions are on the up and up this year, and you’re wondering how the process works. Or maybe you’re entering into the process yourself, and you want to know what to expect. 

Here’s some things you need to know.

1. Devise Your Mergers and Acquisitions Strategy

M&A experts start the process by first figuring out what you want to gain from acquiring another company or business. What do you hope to gain, why are you doing it, and what do you foresee for the future? Knowing the answers to these questions will guide you in the next steps.

2. Search For Potential Acquirees and Reach Out

With your strategy in mind, you’ll next want to search for potential businesses to acquire. You’ll have to set search criteria first, for example, what geographic location would work? What are the ideal profit margins? 

Once you narrow down the pool, it’s time to reach out to the businesses that fit the bill. This first conversation will help you to see if they’re open to a merger, and if it would be a positive business decision for the both of you.

3. Negotiate

After the initial conversation, you’ll be able to gauge who’s interested — and start discussing the terms of a potential merger. You’ll want to brush up on your negotiation skills before you dive into the process. In the end, though, you should come up with something that’s as beneficial to you as it is to the acquiree.

4. Do Your Due Diligence

Next up is the most exhausting part of the M&A process: due diligence. Through this step, you’ll be able to confirm the target company’s value through a series of checks. You’ll look at everything from the customer base, to its assets, to its liabilities and the human resources they have too. 

Once due diligence is finished, you will be able to confirm or deny the merger. And, from there, it’s all about making the final financial steps in the process.

5. Draw Up the Contract

You will have considered the financial requirements of acquiring another company already. But now’s the time to build your financial strategy and draw up a contract that suits both you and the business you plan to acquire. 

Make the Merger

With a contract agreed, you’ve reached the end of the mergers and acquisitions process. You’re left to bring both businesses together, integrating the acquired company into your pre-existing one.

This can all be quite confusing, of course, so if you need an expert to guide you, contact us today. Solomon RC Ali specializes in negotiating acquisitions, as well as figuring out the details of financing and implementing corporate strategies to make the merger as smooth as possible. In other words, we can take care of the above steps to make for a painless transition — one that’s fruitful for both you and your acquiree.