A Newcomer’s Guide To Mergers and Acquisitions

Mergers and acquisitions require a lot of critical analysis and planning to carry out correctly. When handled with diligence, they represent an opportunity to grow quickly and to reach a return on your company’s investment far faster than establishing a new division or subsidiary from scratch, but when they are carried out hastily they can cause your core business to become life support for a company that takes too much work to get a return out of. That’s why successful executives in M&A are recruited heavily across the industry. If you’re getting started in this niche, there are a few key points to make sure you get right from the very first deal you make.

Understand Your Obstacles

Due diligence isn’t just a legal term, although it is a legal term. To really understand whether a deal is the one your business needs to make right now, you need more than just the financial disclosures you get during the merger process. You also need to understand how the company has been behaving in the near past, as well as its relationships to its suppliers and competitors. This kind of intelligence won’t just be handed over, it requires the mergers and acquisitions specialist to go out in search of it. By watching your prospects in the marketplace and keeping your ear to the ground to determine who else might be looking to make a deal with them, you can get a better sense of the full facts surrounding this merger. That makes it easier to negotiate successfully by giving you a clearer idea what it will take to close.

Get Your NDAs in a Row

One of the biggest problems in this field is leaking information. Using nondisclosure agreements to protect the secrecy of your negotiations is a key part of making sure there are consequences for anyone who lets details slip. You need to make sure they are specific and detailed, but you also need to be aware that very little moves as quickly as corporate gossip. It’s very likely you will hear rumors that are correct but don’t have a real source, simply due to the breadth of the speculation that often happens. If possible, keep even the fact that there is a negotiation confidential until the mergers and acquisitions team is ready to unveil the deal to the world. That can help ensure that any rumors you hear have an actual source, which makes it easier to figure out who spilled the beans.