All businesses will face the issue of mergers and acquisitions at some point because of the business life cycle. To remain in business, owners must find a way to innovate, revitalize or transition. To assist the transition, California moderates mergers and acquisitions to protect both entities from unlawful practices. You and the other business entity may have to sign an agreement of merger document. You may want to consult with a Merger and Acquisition (M&A) Advisor to navigate these challenging waters.
Know your M&A goals
What you hope to get out of mergers and acquisitions will influence which advisor you choose. Some advisors may have more experience in one industry than others. Factors you may want clear are your willingness to sell your business, desire to enter new markets, and desire to minimize competition.
Conduct a SWOT analysis
You increase your negotiating power with M&A advisors when you conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis of your potential M&A deal. This type of analysis gives you more clarity on the valuation of the businesses and how much they should charge in fees.
Check the advisor’s experience
You may want to check the success rate of the advisor’s past work. It’s also a good idea to search for any legal issues related to the advisor and whether they successfully resolved those problems. Another aspect of an advisor’s experience that’s worth checking is which markets and regions they have worked in. You may want to choose someone who has experience that is relevant to your region and industry.
Ask for referrals
One way of finding mergers and acquisitions advisors is to ask your business connections if they have any recommendations. You could then research these options to see if any are suitable for your needs. Bankers, accountants and attorneys also usually have experience or knowledge of M&A advisors. If you know anyone in those careers, you could also ask them for their recommendations.
It’s not just large businesses that benefit from hiring M&A advisors. A small business owner will most likely want to consult with one at some point to keep their business going or to expand before their business has a chance to contract too much.
