8 Ways to Prepare a Firm for Acquisition or Merger

merger and acqisition

One of the most important key steps before M&A is preparation. The process of M&A can be a cumbersome and tedious process for firms. The new transition wave can bring a significant amount of changes like change in the mindset of people, new leadership styles and culture, etc. Preparedness is the core and it should be a company’s topmost priority. 

There are primarily two kinds of collaboration. They can either be strategic or financial. Let us discuss some of the important ways in which an organization can prepare for M&A. 

Embrace the new culture and focus on strengthening your brand 

Merger and Acquisition firms should readily accept the new culture and should proactively adopt the new culture. Irrespective of the M&A, the core emphasis should be laid on preparing the brand for a fight and flight situation. The transition should not only be swift but also be seamless. 

Right and clear communication must be need of an hour 

Being transparent with regard to communication always helps to recover the setbacks of the business. Vague and unclear messages will lead to low productivity and the team/employees of mergers and acquisitions firms will also be demotivated to work. 

  • Looking at the bigger picture- Sometimes firms fail to see/witness the future repercussions of M&A. The company is often distracted during this process which might be harmful to its reputation. The person buying the firm will closely monitor the financial performance of the company while reviewing it before the due diligence process and forecast certain projections. 

.Put the right strategy in place- Strategic planning helps to avoid failures during the M&A phase. Putting the plan forward along with the alignment of goals, vision and mission is an essential prerequisite that Merger and Acquisition firms should keep in mind. 

  • Carefully participate in the negotiation process- Normally CEOs are not advised to participate in the negotiation process because it might lead to a conflict of interest. Organizations should ideally form a Merger and Acquisition committee and the foremost step must be initiated by the seller’s counsel. There must not be even an iota of doubt before the wave of transition strikes in. 
  • Resolve all employee-related issues- Before the M&A process, all the concerns related to the team members and internal stakeholders must be sorted out. Keeping your employees in confidence is one crucial way to prepare for the M&A activity. Deal with honesty and make the situation clear that the status quo will change so that there are no hiccups in the process. 
  • Don’t forget to take expert opinions- Companies often feel that they know it all, but it is always advised that they should take suggestions and inputs from lawyers and corporate counsels. The legal team must comprise a dedicated Merger and Acquisition lawyer. 
  • Develop a smooth transition plan- Formulation of the blueprint of the transition wave must be present on the checklist. If you have successfully executed the process on paper, there are high chances that you will have a seamless transition. A due diligence checklist along with a statement of roles and responsibilities will help you ease this process. 

Even after following these processes, one must understand that Merger and Acquisition is not a cakewalk and it cannot happen overnight. It is a lengthy, complex and detailed process that should take place gradually. We have tried to convey and illustrate all the key steps which will be helpful. The firms must remember the true purpose and should think beyond their vested interests. It should be kept that in mind that as per statistics 64% of the mergers are unsuccessful only because of lack of preparedness. If the parties remember and stick to the objectives laid before the M&A, the company can certainly be benefitted. Some of the milestones which can be achieved from M&A are reduction in cost, harvesting the benefits of economic growth, and increase in market share. It should be more like a collaboration which should create synergy and benefit the target audience.