Mergers and Acquisitions
Mergers and acquisitions represent one of those strategies with the potential to help a business meet and exceed growth expectations to the benefit of all. The advantages are clear: access to a wider customer base; obtaining new staff with an array of talents; diversification of products; reducing competition and much more. It makes perfect sense, right? Well, maybe.
Growth represents the overarching objective for almost every business.
Developing a customer or client base, recruiting more staff, generating greater revenue – these are the ambitions that drive SME business owners to new levels of success. But growing your business isn’t simple. It takes considered investment, sound business strategy and the instinct to know when a risk is worth taking.
The integration of one company into another is a process fraught with risk. The level of work that needs to go into redeveloping the infrastructure of the business, redefining the company vision and absorbing talent into the workforce is staggering. As such, many attempts at merging two independent entities end in failure. So, what exactly is the secret to making your mergers and acquisitions a success?
Understanding why M&A fail
To understand how mergers and acquisitions work successfully, it pays to address those issues that often cause them to fail. Some basic flaws can often be attributable to the success or failure of the process, such as lack of a clear strategy, poor communication between the key parties and unsatisfactory project management.
When you consider just what mergers and acquisitions entail, perhaps these flaws are to be expected. After all, the entire process requires the merging of teams, processes, working practices, and different personalities. That’s even before addressing technical issues related to IT infrastructure, property requirements, and the integration of pre-existing systems into a new workplace environment. It is hardly surprising that while the benefits are significant, the work to achieve a successful merger is daunting.
Managing mergers and acquisitions
One of the key considerations for any merger or acquisition is for the process to minimise the level of disruption to current work. After all, failure to uphold the standards expected of both parties could impact the future successes and customer retention going forward. Managing mergers and acquisitions successfully means that it is imperative to maintain the level of focus afforded to the existing customers. As much as the hard work will be ongoing behind the scenes, keeping the core emphasis on delivery is a priority.
Furthermore, it’s vital that employees on both sides of the transaction are given full respect and sufficient notice that a merger is happening. Providing a level of transparency on the progress of any negotiations will ensure that staff confidence in management is maintained and the quality of work upheld. If your existing – and future – employees feel ‘out of the loop’, it should come as no surprise if they begin to look for jobs elsewhere or start to work with less enthusiasm.
The key to a successful Merger or Acquisition
Though we have touched on some of the main benefits, things to avoid and some core considerations of completing successful mergers and acquisitions, you may be asking yourself what you can do to ensure the process runs smoothly. In this respect, there are three main tasks that require addressing at the earliest-possible stage:
- Developing a clearly defined strategic plan
- Securing key stakeholder investment
- Ensuring full company engagement
You should never underestimate the importance of having a clearly defined plan; after all, this will be the roadmap to completing the process. Introduce this as early as you can – even at the point of negotiation – and ensure that all key stakeholders are in agreement and on-board with the actions. You can also offer top-level information on a company-wide scale, ensuring that everyone that the merger or acquisition will affect has been given visibility of the goals and knows the actions to take.
Put simply, full buy-in to the process is vital.
Strengthening your own business by merging
The future of your business depends on your ability to evolve, mitigate risk, and make decisions that facilitate growth and security for all involved. Entering the world of mergers and acquisitions provides the opportunity to strengthen the position of your business within your chosen industry, absorb the expertise of others, develop a joint customer base and combine assets to help take you to the next level.
The complexities of the entire process will undoubtedly prove challenging to you and your business. But by ensuring you develop the correct strategic plan, secure the support of key stakeholders, and communicate effectively with employees, there is no reason that you cannot achieve the levels of growth you desire.
For support on Mergers and Acquisitions, talk to us today.
Third-party involvement during mergers and acquisitions means having access to an independent expert to act both as a mediator during negotiations and an advisor on strategic development. This party can also prove a valuable pillar of support for employees through the provision of expertise, education, and information.
With THP Chartered Accountants, you can rely on an experienced team of mergers and acquisitions professionals who offer the advice you need to complete your merger or acquisition successfully. Our teams – based in Cheam, Chelmsford, Saffron Walden, and Wanstead – will support you every step of the way, helping you to identify suitable businesses with whom to collaborate, to secure funding and to raise the required capital.
Contact us today to discuss your requirements and we’ll be happy to provide the advice you need to support the growth of your business through a viable merger or acquisition.
About Andy Green
As Client Director Andy Green works primarily in delivering audit and assurance services, particularly in the Retail and Technology Sectors, as well as being the firm’s Compliance Director. These roles both bring great responsibility in ensuring that the outstanding quality and reputation of the firm is maintained.
After training and qualifying with a mid-tier firm of Chartered Accountants in the City, Andy spent some time in investment banking before joining THP in 2008, a move driven by his desire to get back into the profession. “The beauty of working for an accountancy practice is that every day is different – and you’re constantly achieving successes for your clients.” With Andy’s natural ability in interaction, THP is the ideal place.
With his positive drive and sense of humour Andy works with an array of clients, giving each the ultimate attention no matter what the size of their company.