You might have a successful merger and acquisition with the company and currently working in forming a new one. However, there are certain things that need to be considered while undergoing the M&A process. One needs to address the issues before it rises, so that it minimizes the damage. Seeking legal advice from professional firm and understanding the process is very important. Generational equity is essential part of the M&A process.
Merger is not entirely an acquisition; but is full of consolidation of separate small business. According to the experts, true merger is when both companies dissolve their assets and liabilities.
If you’re getting into M&A for the first time, here are few do’s and don’ts to consider:
Do’s:
You need to take your time before to know about the other business owners, personalities and commitment for the future growth.
Have a check over the certain details. There are certain areas that need to be covered:
- Reviews of financials
- History of Business
- Details of any debt
- Customer Files
Though people aren’t much interested in going through the financial statements, but it is essential to go through.
- Understanding the initial stage of merger for the next 6 months. You need to plan out about the workings after the merger.
- Need to accept that mergers may damage your on-going successful business because you spend most of your time and money in merging.
- Provide consistent message to the staff about the latest happening in the merger process.
- Stay positive and calm throughout the merger.
Don’ts:
- Never rush through the process, but also don’t let the process get down. Moreover, don’t be afraid to walk during the meeting.
- Never go for merging if it benefits only one-side. Check and address inequalities right in the early negotiation.
- Never let third party push you hard for the merger. They may do this to earn their fees.
- Make sure your employees don’t learn about the acquisition from the other sources. This will let to the loss of trust.
- There might be situation where staff may leave the job due to uncertain future. You need to be prepared for such situation.
Considering these do’s and don’ts will certainly help in getting the best result out of the merger. One thing you need to keep in mind that, you need to stay patience and see if it benefits both parties in larger scale. You can seek ideas and go through previous M&A by companies, on how they deal with the process and still running successfully. This will certainly help you to perform the process successfully. Generational equity is the best way to understand the process of M&A and how better the dealing can be handled.