4 Straightforward Tips To Help Your Company’s Next Merger or Acquisition Go Off Without a Hitch
by Mashum Mollah Business 10 December 2021
Is your business getting ready to acquire a smaller company or undergo a merger with another company or corporation? If so, there are several steps you should work through right away to ensure a smooth transition.
If you want your merger or acquisition to go off without a hitch, the importance of being knowledgeable and prepared for the upcoming changes cannot be understated. From understanding the financial implications to considering the impact on your company’s culture to establishing strong leadership and more, there are numerous factors that have to get taken care of to ensure a smooth process.
Before you finalize your merger or acquisition, make sure you read through these four straightforward yet essential tips.
1. Carefully Research All the Financial Implications of the Acquisition or Merger
One of the biggest challenges of making any merger or acquisition goes through smoothly is making sure that all the relevant finances are in order. This is one area where you may want to assign your best accountants and financial advisors to the case, or even hire outside business brokers to help ensure you don’t miss any details.
There are numerous financial implications involved in mergers and acquisitions, so be sure to comb through all the paperwork and take all financial matters into consideration before signing any restructuring documents. Your calculations should take into consideration financial factors such as:
- Overall company valuations
- Incorporated total company assets
- Employee payroll
- Tax status implications
- Employee benefit expenses
- Real estate lease or mortgage expenses
2. Create a Strong Leadership Team To Keep Everything on Schedule and Oversee Details
When your company is undergoing something as drastic as a merger or acquisition, having strong, reliable leadership at the helm can make all the difference. Putting together an effective and competent leadership team can help keep the process on schedule and make sure no crucial details are accidentally overlooked. Your top-level management team should be able to:
- Manage transition teams
- Oversee the coordination of small details
- Check legalities relating to the corporate merger or acquisition
- Present a strong, united front and set the tone for lower-level employees
- Strengthen the company’s public image and brand
3. Ensure All Parties Conduct Due Diligence and Enforce Legal Compliance
Mergers and acquisitions often entail a lot of minor legal details that need to be attended to before the transition becomes final, so it’s important to check that all parties involved are compliant and have done their due diligence. Make sure you:
- Achieve an accurate valuation of the companies involved
- Conduct due diligence to ensure no important aspects of the merger or acquisition are left unexplored
- Check for potential legal compliance issues and enforce all relevant rules and regulations throughout the merger or acquisition process
4. Consider the Merger or Acquisition’s Impacts on Company Culture
Lastly, don’t forget that a merger or acquisition can have ripple-like effects on your corporate culture, which can then impact employees’ day-to-day work experiences in the office. Make a plan for dealing with potential cultural clashes. For instance, you may wish to institute:
- Getaways and company-wide excursions or similar events
- New joint employee meetings and training
- Company mission statements and mission guides provided to all employees
- Coherent, cohesive leadership unified on company goals and values
The process of merging two companies or having one company acquire another can involve a lot of financial, legal, and even cultural legwork. Before your company undergoes one of these major processes, make sure you’re fully informed and prepared by reading through these four essential tips.
Prepare for the financial implications, create a strong leadership team, make sure you’ve conducted your legal due diligence, and make a plan for the upcoming impact on company culture, and you can help ensure that even an expansive and large-scale merger or acquisition goes off without a hitch.