Merger and acquisition (M&A) activity is quite common, but some of these deals are more complicated than others. If you’re in the beginning phase of an acquisition deal, you might want to first learn what to expect throughout the process. Below are some of the steps involved in an acquisition, and you can learn even more by researching the process online.
- Developing a Strategy
This is the step where everything is decided upon, including the purpose of the transaction and the possibilities regarding the financing.
- Identifying Target Companies
Evaluation of target companies is a must because you can’t go into the process without any clue of what type of companies you wish to acquire.
- Analyzing the Value of the Target Companies
This is where you get to know the target company, including their financials, operations, customer base, main product or service, and any issues that need to be resolved before moving forward.
- Negotiation of Offers
After the value of the company has been determined, you can start the negotiation process and see if it’s possible for the two businesses to come to an agreement.
- Doing Your Due Diligence
Researching the target company from both external and internal sources allows you to get to know them better in case you missed something earlier.
- Closing the Deal
This step sometimes takes a while because the two businesses can go back and forth before anything is agreed upon, but in fact, you should take your time at this point.
- Financing and Restructuring
Financing the deal occurs at this point, and afterward, the two businesses have to be restructured into one company. This, too, can take some time.
- Integration and Back-Office Planning
Included in this step are governance structure changes, filings and registrations, choosing legal representation, and compliance issues, among others.
- Post-Merger Compliance Issues
Integration and compliance include numerous steps that are critical to the acquisition, but realizing that this is not the end of the process is also important.
- “Business as Usual”
Once everything is set up properly, you still have to constantly monitor the operations of the new company to make sure it succeeds.