Finding a Suitable Partner for a Merger
The search for a suitable merger will be based on a number of things. The finances of the other party, as well as the assets and personnel they can bring to your business, will be a huge factor.
However, more important is to find a business that has the same brand mission and similar goals for the future that your company has.
Without this, it’ll be extremely difficult to perform a seamless merger and it could create more trouble than opportunity.
Succession Link provides a platform for find the perfect partner for merger opportunities. There are hundreds of business owners searching for potential M&A opportunities on our database. We provide you the means to communicate with them, without taking a fee from the proceeds of any partnerships.
The negotiation process will begin with both parties signing a letter of intent. It’s likely advisors and consultants will be hired to help both parties hash out the terms of a potential deal.
Details such as the share/exchange ratio, the deadlines, the type of merger (merging into a separate company, or one company merging into another) will be discussed here.
Again, perhaps the most important factors to determine during the early negotiations are the future goals of both companies, and whether there’s a difference of interest which could cause friction later down the road.
The due diligence process involves financial and legal experts inspecting each other’s books to ensure that true representations of each other’s finances have been shared between both parties. Get your own books in order to make sure there are no stumbling blocks at this stage.
The merger is confirmed following a special meeting of the boards of directors, where any final opposition from creditors and bondholders are heard, and the deal is (hopefully) ultimately passed. This may need approval from a central regulator before the deal becomes official.
The merger is not publicly confirmed until after this directors meeting. An important step at this stage of the process is communication about the merger to existing clients, customers, and employees.
It is common for these individuals to panic and seek a future away from your company following news of such a dramatic change, especially if communication of any changes aren’t detailed.
People typically respond to uncertainty by assuming the worst. It’s your job to ensure as much as continuity is maintained as possible during and after the merger process - and to communicate that this will be the case with as much detail as you can.
The implementation of the merger, including any rebranding, repositioning of staff, etc. can take some time, but it’s not uncommon for the whole process of a merger to be completed within a year, even for the largest companies. Some mergers take longer, but the more efficient you are throughout this process, the sooner you can enjoy the benefits of it.
Visit the Succession Link website to find out more about finding the right merging partner for your business.