Acquisitions

Acquisitions and Mergers

If you're looking to grow your business you may want to consider a merger or acquisition as an alternative to generic growth.

There are lots of benefits to growing your business in this way and it's often the case that one plus one can make three (or more) for even the smallest businesses.

A merger or acquisition can often create a more competitive, cost-efficient structure as well as creating economies of scale, enhancing sector visibility and gaining a greater market share.

Pure mergers are more unusual than acquisitions, simply because there's rarely a merger of equals. The usual scenario is for one business to take over another and establish itself as the new owner. The target business then becomes a subsidiary of the acquirer, or its assets are assimilated.

Making the merger or acquisition work for you is a challenge for the management team, which will be dealing with a range of logistical, financial and cultural issues.

It's important to reassure your newly acquired customers that the change will benefit them, or at least keep things the same. Quick and effective communication is essential to customer retention.

Steps to a typical merger or acquisition include:

  • Financial due diligence / valuation of the target and a review of the structure of the transaction including taking tax advice
  • Agreeing an offer and putting a Non-Disclosure Agreement and Heads of Terms in place (the Heads often establish the key principles of the deal and pre-empt detailed negotiation of any commercial matters later in the transaction) – an additional Lock-Out Agreement can be a good way to ward off other buyers at this stage
  • Conducting the Legal Due Diligence process
  • Negotiating the transactional documents including the Share Purchase Agreement / Asset Purchase Agreement as well as ancillary documents
  • Completion of the acquisition / merger.

Register today or contact us to access specialist advice, events, training and more – all designed to help you grow your business and help you consider, plan for and undertake acquisitions and mergers.