Manage Your Merger with the Experts at M & A Consulting

 

Uniting two existing companies into a newly formed single entity is whats known as a Merger. While the general public hears of mergers between mega-enterprises every once in a while, the reality is that these transactions are actually an incredibly common business practice. Whether the goal is outright expansion, getting ahead of competitors, gaining market share or simply to please shareholders, mergers are completed to create value. Common merger ideology dictates that 1 + 1 should equal 3. That is, the newly formed company's value should be MORE THAN the combined value of the companies that merged to create it. While this can't always be the case, having a strong advisory board or consultant during the process will put the odds in your favor. This is where we come in. Our M & A experts have the experience and know-how to ensure the utmost satisfaction upon closing the deal. We employ by-industry professionals that stay shoulder to shoulder with you through every step of the process, even after completion, to make sure the transaction is handled fairly and reaps the maximum benefits. 

 

 
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Types of Mergers

It is important to keep in mind that not all mergers are the same. There are many reasons for mergers to occur, and with that in mind many different types of mergers. Depending on the companies involved and the reasons behind the proposed deal, mergers are typically categorized within these five types:

  • Conglomerate Mergers - Involve the merging of companies that partake in completely different business activities. Can be further categorized as pure or mixed.

  • Horizontal Mergers - Involve companies that exist in the same industry, and is more or less a consolidation.

  • Vertical Mergers - Involve companies at different phases of a finished product's production process merging together to increase synergy.

  • Market Extension Mergers - Similar to the mixed conglomerate merger, This transaction involves companies that sell the same product in different markets looking to create a bigger market.

  • Product Extension Mergers - Also similar to the mixed conglomerate merger, this is when companies that sell related products that go well together combine.

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The Merger Process 

Corporate Mergers are a process that is often heard of, and seldom understood. There are various phases that both companies must pass through before any paperwork is signed to close the deal. While Mergers and Acquisitions share many of the same stages, a merger usually ends in a restructuring of the surviving company as a newly formed entity. Individual state statutes (which establish procedures to accomplish corporate mergers) have been put in place and apply to most merge deals. While the details of every merge may be different, the general process remains the same.  

  1. Generally, the very first step in a merger is the meeting of the controlling parties or board of directors for each company. During this phase, the merge is discussed as a hypothetical.

  2. If the initial meeting is a success, the next step requires the involved companies to, in unison, adopt a plan of merger. This plan must specify the names of the companies involved, the proposed name of the newly merged company, how the shares of the involved companies will be converted, and all other legal provisions that the companies agree on.

  3. Each Corporation must then notify all of its respective shareholders of a meeting to approve the merger plan.

  4. The approval/denial meetings are held.

  5. If the appropriate number of shareholders approve of the merger plan, then the directors of each company sign the paperwork, and file with the state.

  6. The Secretary of State must then issue a certificate of merger to authorize the new corporation.

The real intricacies of the merger process lie within the details of the merger plan, and the negotiation that may take place if shareholders cannot agree upon the set plan. This is why consultation with M & A experts is crucial. Detailed analysis of both companies as well as the market(s) involved help in creating a structured, well received plan for all parties involved. Our team not only focuses on the trade aspect of the merge, but the well being of the surviving company after the deal is done. Keeping an eye on the future is the key to a successful merge. 

 

Dedication to Acquisition Strategy

 

Acquisitions are when a company purchases most, if not all of another company's ownership stakes and assumes control. This is different from a merger in the sense that one of the original companies takes complete ownership of the other company involved in the deal instead of forming a new company with a new name. Acquisition is a powerful move to to expand any company, and gain a stronger footing within a market. A corporate acquisition can be either friendly or hostile. Whether an acquisition is viewed as a hostile takeover or not all depends on the stance of the target company.  

 

 
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The Acquisition Process - Buyer

The Acquisition process is one of the most common business practices. That being said, while simple in theory, it is not something to take easily. Acquisitions require extensive research and groundwork in order to be successful. The reasoning behind the acquisition, the prospective market conditions, and the resulting status of the buyer company are only a select few things that must be kept in mind when working on an acquisition deal. The buyer company, while in a position to benefit the most from the deal, assumes all major risks and responsibilities in conjunction with the acquisition. The only way to minimize these risks is to form an acquisition strategy with the help of M & A professionals that specialize in the industry in question. After a solid strategy is formed and agreed upon, the general process is as follows. 

  1. Set the Acquisition Criteria

  2. Search for all possible acquisition targets

  3. Devise targeted acquisition plan

  4. Undertake valuation analysis on target companies

  5. Negotiation phase

  6. Acquisition due diligence

  7. Purchase and sale contracts are to be drafted

  8. Acquisition financial strategy is formed

  9. Closing and integration

The team at M & A Consulting offers invaluable assistance before the process begins, through every step, and after closing in order to promote a healthy transition and boost synergy.

Sell Your Business with M & A Consulting

 

To be a "Target Company" up for acquisition may sound like the end of an investment, but at M & A Consulting, we make sure that it is also a bountiful beginning. Building and growing a business requires years of hard work and effort. Not only do we understand this, but we make it our duty to guaranty that when a business is sold and the deal is closed, that former owners can walk away with pride and piece of mind. Having expert advisers on hand and preparing a sale strategy is vital to this goal. Even in the event of takeover, our team will fight for a just deal that will be worthy of parting with a company. 

 

 
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The Acquisition Process - Seller

If your company is in the position of being acquired,  the most important thing to note is that it has a meaningful value to whomever is buying it. This mindset is paramount to creating stratagem that the seller can be content with upon closing. The buyer may be expanding their market value, but the seller must have an appropriate gain to match. We've even created a dedicated Sell-side Acquisition team to ensure just that. Once analysis is through and a structured sell strategy is devised, the general process of an acquisition continues.