Rocky Results of Mergers and Acquisitions – The Different Phases of Mergers and Acquisitions
Every year since 2000 was the year of mergers & acquisitions. according to the IMMA Institute report, over the past two decades, there were almost 800,000 transactions worldwide valued at 57 trillion USD. Only in 2019, there were 49,000 transactions valued at 3.8 trillion USD.
However, to be successful, a merger and acquisition (M&A) process has to go through all the phases. That’s why each stage has to be dealt with accordingly. To help you out get ready for your M&A, we have listed all the different phases you have to know about.
Avoiding rocky results of M&A starts with good old analysis. The entire success of the operation depends on it. To ensure that you are pouring cash into something that will return it, you have to put it under the microscope.
Analysis of the business you are considering for M&A should encompass numerous processes. While determining the cost of M&A should be put on paper, there are other things to do as well. The important thing is to assess the target business’s finances, human resources, technology, and intellectual property.
Terms and Conditions
To be successful, every M&A should be put inside a legal frame of reference. This will help you protect your assets and ensure that everything is done according to the law. But it goes beyond that. Terms and conditions should also reflect your plan to leverage the M&A to the best of both businesses.
The so-called agreement should contain a detailed M&A plan. You should highlight and define the strategies for change in management. You should also cover how the inventory will be assessed, and outline the new organizational design. The terms and conditions for the M&A should also contain a detailed plan of the future communication network and how the information will flow.
The integration phase is when the crucial things happen. During the integration phase, you will have to manage the change. To successfully handle change management, you will have to stay on top of all the processes and evaluate changes and recommendations in real-time. To easily monitor the timeline, you’ll need to make a change plan and a strict schedule.
Vendor selection and consolidation are also due in this phase. Sticking with trusted vendors with long repeat-business history is vital for success. During the integration phase, you should also keep an eye out on improvement opportunities.
Plan For Leveraging Benefits of M&A
Whether you wanted to reduce operational costs, improve efficiency, or enhance revenue opportunities, the final phase of M&A is reserved for doing it. The success of this phase depends on all the previous phases, with the “Analysis” being the most important one.
Every M&A is done with a goal in mind, and now is the time to achieve it.
Every M&A is different, but, in general, each one goes through these four phases. The success of the M&A you are going to be responsible for will depend on how efficiently you can plan and manage all the phases. If you need support, you can always count on Sales Synergy Consulting, an M&A consulting firm.