Mergers and Acquisitions
Mergers and Acquisitions Services
Driven by globalization and strategic or economic barriers to internal growth, mergers and acquisitions (M&As) are one of the principal ways in which organizations can achieve rapid growth.
Common reasons for M&A deals:
Access to a developed customer base and cash flow (including new distribution channels or geographic markets)
Gaining access to new technologies and organizational capabilities that can be used to broaden strategic opportunities
Consolidation of business units or industries to increase revenue and share prices
Ability to leverage economies of scale and synergies that reduce the costs of the combined company, relative to total revenues.
Merger and Acquisition Process
Merger and Acquisition Process is probably the most important thing in a merger or acquisition deal as it influences the benefits and profitability of the merger or acquisition. This Process is carried out in some steps which are discussed in the following page.
The Process is a great concern for all the companies who intend to go for a merger or an acquisition. This is so because, the process of merger and acquisition can heavily affect the benefits derived out of the merger or acquisition. So, the Process should be such that it would maximize the benefits of a merger or acquisition deal. The Merger and Acquisition Process can be divided in to some steps. The stepwise implementation of any merger process ensures its profitability.
Preliminary Assessment or Business Valuation
The target company’s market value is assessed in this first step of the Merger and Acquisition Process. This evaluation process considers not only the company’s current financial performance but also its estimated future market value. The company that intends to acquire the target firm conducts a thorough examination of the target firm’s business history. The firm’s products, capital requirements, organizational structure, and brand value are all rigorously scrutinized.
Phase of Proposal
After the complete analysis and review of the market performance of the target company, the second step is the proposal for a merger or acquisition. As a rule, this proposal is made by issuing a non-binding offer document.
When a company decides to acquire the target company and the target company agrees, it conducts exit planning. The target company plans to exit at the right time. It considers all alternatives, such as outright sale, partial sale, and others. The company also performs tax planning and considers reinvestment options.
After finalizing the Exit Plan, the target firm involves in the marketing process and tries to achieve highest selling price. In this step, the target firm concentrates on structuring the business deal.
Origination of Purchase Agreement or Merger Agreement
In this step, the purchase agreement is made in case of an acquisition deal. In case of Merger also, the final agreement papers are generated in this stage.
Stage of Integration
In this final phase, the two companies are integrated through a merger or acquisition. This phase ensures that the new joint company follows the same rules and regulations throughout the organization.
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We have a proven track record of advising companies in difficult situations through the development and implementation of financial and/or operational restructurings.
2015 was a record year for mergers and acquisitions (M&A).
Global M&A activity reached $4.9 trillion, surpassing the record of $4.6 trillion set in 2007, according to Dealogic statistics.