Expert advice on planning mergers and acquisitions
Craig Blackmore, director at leading business advisory boutique Verde Corporate Finance, is offering his industry-leading advice surrounding corporate and commercial mergers and acquisitions (M&A).
With almost 20 years’ experience advising in accounting and finance, Blackmore is well-versed in the potential benefits an M&A can bring to businesses of all sizes.
Verde Corporate Finance is part of the Greenaway Scott Group which advised on announced M&A deals exceeding £130 million in 2017.
The M&A expert said: “Mergers and acquisitions can have numerous benefits, from eliminating the competition, to reaching new markets, and gaining new customers.
“There are a multitude of benefits that companies can enjoy from combining their business interests and looking at a collaborative way forward.
“However, these can only be achieved through a well-strategised, effective, and focussed plan, which is supported by a business advisory team.
“It’s absolutely worth investing in obtaining expert advice in order to achieve the results you want.”
Here, Blackmore offers his top tips for successfully approaching a merger and acquisition.
Ensure you have shared goals
The first step is to ascertain that both companies have shared business goals and objectives. Is there anything you disagree on? Do you undertake different practices in relation to similar areas that could cause friction? These are questions that directors should pose from the initial discussions to identify whether the merger is in the best interests of both companies.
Once you have ascertained an understanding with the company you are merging with, or acquiring, it’s time to enlist the services of a business advisory specialist.
An expert in M&As can assist companies on effectively restructuring the business, the legal implications, tax considerations following a transaction, and also any future business forecasts which could occur as a result of the new company structure.
Speaking to an M&A specialist ensures that businesses receive tailored, thoroughly considered advice, which takes into account their future objectives and advises them of all their available options.
Ensure you have enough liquidity in the business
Determining financial stability ahead of conducting a merger and acquisition is absolutely essential to safeguard the continued growth and success of your company.
Available liquidity, or funds, is a frequently overlooked aspect of M&As, but it is among the most vital.
Not only is this important to establish in the company you may be merging with, or acquiring, but it is also crucial to assess your own liquidity.
Without assessing your available funds, entering into a merger and acquisition could put the business at risk, and make the transaction unsustainable.
Organise your due diligence
When merging or acquiring a business, it is essential that both parties provide sufficient financial information in a prompt and organised manner.
By organising all the relevant information, this will assist in identifying any problems before a transaction progresses. This process is known as due diligence.
Due diligence allows buyers the opportunity to investigate the business they are purchasing to validate what has been claimed by the seller, and potentially, identify any red flags.
As such, business owners planning a merger, are frequently advised to undertake their own due diligence investigation within their company, to ensure any issues are identified at an earlier stage.
Likewise, companies planning to acquire a business should insist on receiving full financial and business disclosure from the seller in advance of the acquisition.
Due diligence should include details of the structure of the organisation; assets; audited financial statements; intellectual property; contracts; employee records; and tax records.
Be aware of office culture and staff integration
Mergers are acquisitions are very much the forming of a new organisation.
However, each company involved in this transaction will have its own pre-existing teams who are familiar with their own company culture, policies, and areas of responsibilities.
In an M&A, employees will automatically transfer in accordance with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
Managers looking to blend teams and offices could ease the transition at an earlier stage by encouraging frequent communication between staff from both organisations. Ensure that they communicate openly from the start to establish an integrated and successful working relationship.
Published: 04 May 2018