Tips for Successful Mergers
Businesses are always looking for ways to improve their profits and strengthen their positions in the marketplace. One way to do this is through acquisition. Purchasing another company is a complex undertaking, but one that may be very worthwhile. Before you take on this new challenge, it is helpful to know the top tips for successful mergers.
Know Your Financial Strengths and Weaknesses
Merging is best done with a company that brings improvements to your organization. Before you can properly evaluate another company, you must evaluate your own strengths and weaknesses. It is especially important to review your finances in depth. This will provide you with a better understanding of where you are so you can make decisions on where you want the company to go.
Determine Your Goals for the Merger
You should first form a vision of what you intend to accomplish with the merger. Communicate this to others in your organization. Analyze your goals to ensure that they make good business sense. Review exactly what it is you want to see happen by defining your company’s short-term and long-term goals. Make sure that the merger fits into this vision.
Assemble an Experienced Acquisition Team
Create an acquisition team to look into the merger more closely. If you do not have any in-house candidates for your team, consider hiring outside resources. Experience matters, because a good transition team will address issues preemptively, and will help keep problems to a minimum. The group should examine the possible merger and provide a report that gives good insight into the future.
Negotiate to Ensure a Fair Deal
Know your financial limitations before you start negotiations with another company. This allows you to understand the potential deal that you can make for the acquisition. Remember that some points of negotiation may go beyond financial concerns. For example, you may be able to agree to keep the company’s current employees, or offer improved benefits such as vacation time.
Communicate the Merger with Employees
Communication is essential to a successful merger. Rumors can be damaging to your company and to employee morale. Keep employees informed about the potential merger, along with further details as they become available. Reassure your employees that the company will be better after the acquisition. Take time to speak to workers regularly through email messages and encourage open discussions.
A merger is a complex undertaking that is best done with competent legal guidance. Count on the experienced legal team at Udall Shumway PLC to help you with your merger and acquisition needs.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Successful Mergers, or any other litigation matter, please feel free to contact Stockton D. Banfield at 480.461.5356, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.