Preparations for an Acquisition: Important Aspects that Should be Taken into Consideration

The environment for both acquisitions and mergers is continuously improving, most especially those businesses which belong to the small to mid-market brackets. These are the types of companies that you will usually see processing mergers – simply because the competition gets tighter as years pass by, and many business owners find it easier to catch up with the competition if they merge with other companies and use the other party’s strengths to cover up for their weaknesses and vice versa.

Now that many are looking forward to mergers and acquisitions, every business owner should know the things that they need to know in terms of preparations for an acquisition. The entire process needs to be taken with precaution, not to mention that there are taxes, legal considerations, the complete understanding on what the proposition is all about and many other essential factors that can make this process successful.

Remember that this process doesn’t happen overnight. Although mergers and acquisitions are perfect methods to increase business sales, and some others even call it as a strategic transaction, you have to initially find out whether this entire transaction is going to be a great idea – studying and thorough research has to be done and these are the different things that you need to do while taking care of your preparations for an acquisition.

Understanding the Proposition:

First and foremost, before you even consider signing those documents, you need to understand the business proposal. What are the things that you can get from the merger and acquisition, and what are the possible things that you can lose from it? Will both parties benefit from it? Who are the people that you are about to work with, and what are the other terms and conditions are involved? These may seem like very simple things as compared to legal matters, but before you even proceed with all the other steps in terms of preparations for an acquisition, you need to start with the basics and this is the best way to begin with.

Preparation of Sale:

This process is almost similar to the first step. However, this is the part where you will be discussing the proposal, asking questions and even trying to bargain with some parts of the deal or proposal if you feel like some changes have to be done. If you are being presented with the proposal, don’t forget to ask for copies and it will even be better if there is a Power Point presentation so that you can easier understand the contents of the proposition.

Consider the People, Reputation and the Possible Positions in the Company:

Whether you like it or not, there will be changes in terms of the entire business marketing and other strategies within the company. Remember that along with these changes, you also have to deal with a new set of people, and may even get new members of the board, additional stock holders, while some others will leave. When it comes to doing your preparations for an acquisition, do not forget to consider the people that are involved during the deal.

Legal Processes:

You have to be completely aware on what legal processes should be taken into consideration during the entire negotiation. A corporate lawyer must be present or must review the proposal and must be there to guide you all throughout your preparations for an acquisition. This way, you can be sure that all papers and matters are taken into legal order, and that you can be sure that every single thing that has been agreed upon will apply right after the merger. 

Your lawyer should also be present even after the entire deal, to check on things. This way, you’ll have someone on your side to advice you of the things that you need to know, and someone to guide you on the first few weeks or months of the merger and acquisition.


13 November 2012