It can be a complicated process to go through a merger or acquisition from start to finish, and the process might take anywhere between six months and several years. While there are a number of steps involved with either one of these business transactions, the end result can make it all worthwhile, because the new business entity should be much better positioned to take advantage of prevailing business conditions. That in turn, should allow for a greater likelihood of future business success and profitability.
Steps involved in the process
The first step in any acquisition or merger process will be to consider an overall strategy, and establish criteria for acquiring a new company. Then it will be necessary to go through a period of searching for candidates which might be suitable for acquisition. Once a short list of candidates has been arrived at, it will be necessary to begin planning for the acquisition, and to commence a process of evaluation for all of the candidates originally selected.
After this, extensive negotiations will generally have to be conducted with the most viable candidates, so that grounds for an agreement can be reached. By this time, the list of candidates should be down to one or two, and it will be necessary to conduct due diligence on these companies, so that you can be fully aware of their business status, and so there are no surprises which might develop.
Next it will be necessary to develop a sales contract, which both parties can abide by. At this point, it will be necessary to secure financing for the acquisition, and in the final step, that financing can be used to acquire the new business. From this point onward, it will be necessary to embark on a period of integration of the two companies, so they can become one, and achieve a greater level of success in that new business configuration.
Thinking about a merger or an acquisition?
It always requires a good deal of working capital to successfully pull off a merger or acquisition. If you’re thinking about pursuing one of these types of business transactions, contact us at Navigate Firm so we can discuss financing the transaction.