Many entrepreneurs who have built successful companies dream of being purchased by a bigger company that will take their company to the next level. Mergers and acquisitions (M/A) can be exciting however, they can also be complicated. A successful M/A requires attention and planning in three main areas – legal, financial and process.

Establish a Strategic Goal

Before they begin their search, it’s crucial that the buyer decides the reason for why they’d like to purchase an organization. The reason for the purchase should not be vague or general but rather should align with the goals and goals of the company. This should be the base of any decisions made regarding the search, including how wide or narrow the net will be.

Conduct the Search

Corporate development teams can use LinkedIn and industry associations lists to find companies that meet their requirements. Teams should also consider the various factors that could affect the cost of a deal including the acquired company’s performance in its market, its position in the competitive landscape and its health. assets – intellectual property, physical assets or cash flow and revenue.

When the search is in progress, it’s an excellent idea to hire an M&A consultant or advisor to assist with the negotiation process. It’s not uncommon to get many bids at this point. The seller should be shrewd about what information it provides prospective buyers at this point, as the disclosure of too much confidential information could cause antitrust concerns and could affect the sale.