By Marc Empey
Progressive corporations have realized that a merger is not only dependent on the combination of the two companies’ assets, but also of the cooperation of their employees and human resources. Given that the demand for capital, heavy regulatory burdens, and shifting models of compensation, a business has financial challenges they face when completing a Merger and Acquisition.
Easing the Challenges of Mergers and Acquisitions
Mergers and Acquisitions pose many challenges for organizations. Occasionally, it can be necessary to bring in outside help to ease the transition. Each year, there are powerful mergers and acquisitions which affect businesses behind the scenes. But there are a good deal of M&As that occur every day, flying under the radar from the public eye.
Both Mergers And acquisitions are notable aspects of corporate strategy, corporate finance and management. Business mergers can create a new leadership team for one or both companies. It is both an exciting and difficult time for a business.
The Importance of an Integration Strategy
When the deal is established, we complete the due diligence process. Once negotiations and documentation are complete, the failure or success of a trade is dependent upon the parties’ capacity to execute an integration strategy.
One of the things that happens before the announcement is that members of the company’s organization get excited and have departments within the business begin to handle the transaction for the development of the business. Often, the Merger and Acquisition will fail due to poor planning and strategy for the integration.
Ideally, the integration strategy is one that was created in the beginning of merger discussions and contributes to the success of the merge over the long-term. Most mergers and acquisitions do not succeed based on the goals of the business to generate revenue instead of integrating employees into a combined corporate culture, expectations for the new combined company, and the vision for the merged companies.
The Process for a Merger or Acquisition
As soon as a client identifies a target to acquire or a company that wishes to merge with their company, we draft the letter of intent, or terms sheet. We work effectively from our extensive experience in working with other companies who have been in similar situations.
During an M&A, prepare to ramp up your communication attempts in a significant way. The M&A procedure runs much more efficiently (and profitably) when there are an array of vendors to select from, rather than a handful of ones.
Contact our Palm Springs Mergers and Acquisitions attorneys for help with the transactional process of an M & A.