In the financial press, stories about mergers and acquisitions that take place in SMEs and large corporations are reported every visite site day. While boosting revenue and gaining exposure to new clients are usually the main reasons behind these deals, it is vital that any company looking to enter the M&A game has a well-thought out strategy for ensuring success of a deal.
A successful M&A is a complicated process and the final result is contingent on a variety of factors that must be considered by both parties. A high-quality management group is essential to ensure that your company is able to successfully navigate the M&A process. External consultants and accountants can boost the credibility of your M&A strategy when you solicit their help.
The first step is to perform an in-depth financial health check of your company. This involves analyzing profits and losses statements, assessing cash flow by analyzing debt/equity proportions, and determining if you have the ability to fund an M&A deal. The financial health check will also identify any differences between your Management Accounts and Statutory filed accounts, which could cause confusion for buyers.
Another crucial aspect is to consider the cost of integrating both businesses. This could include physical costs like merging systems, offices and employees. It could be a matter of human capital expenses, for instance calculating the costs of benefit and compensation programs. By involving experts in human capital early in the process, you will be able to accurately assess these costs and include them in your purchase price negotiations.