Early and Strategic Planning is Critical to M&A Success

When one company (acquirer) establishes itself as the owner of another company (target), this is called an acquisition. The consolidation of these companies is known as a merger. Buying, selling, and combining business entities typically occurs when the value of the combined companies is expected to be greater than either company on its own. Effective M&A can bring increased profits, provide access to new markets, and improve the overall brand.

But M&A involves time-sensitive transactions and the potential for monumental challenges to arise at all stages of the process. As such, effectively managing mergers and acquisitions from the beginning is critical to a successful outcome. Knowing how to build the right relationships, define your corporate strategy, and maintain confidentiality are key to ensuring a smooth process. And it’s never too early to start.

How to Ensure a Successful M&A

At Parsus Law, our Pasadena, California M&A attorneys support businesses of all sizes and across all industries during every stage of the M&A process, with a focus on early planning. Every transaction is unique, and determining the most appropriate M&A strategy is highly dependent on the goals and needs of each company. To enter into a successful M&A process, ask the following questions:

•    How do both companies define a successful merger?

•    How will the new entity generate value that is greater than the independent entities were able to create?

•    How will the new company be integrated post merger?

Don’t Dilute Your Core Business Strategy

During an acquisition, the goals and mission of the acquiring company should prevail. To prevent the dilution of its core business strategy, the acquirer must determine that its goals and the target company’s goals are both possible and appropriate early in the process.

Perform Due Diligence

Well-defined planning is critical to preventing unforeseen problems and failures from upending the entire process. The acquiring company must complete due diligence on the target company, while simultaneously assessing and evaluating all potential risk. This means addressing all aspects of the transaction, including regulatory matters, unions, benefit plans, sales & marketing, technology, and any financial or legal implications.

Maintain Confidentiality

Generally speaking, it is in the best interest of the acquiring and target companies to keep mergers and acquisitions confidential until the agreement is fully consummated. That being said, it is equally important to have an effective communication plan in place once the transaction is complete. A smooth integration process is essential for keeping employees on both sides motivated.

Contact a Pasadena Mergers and Acquisitions Lawyer Today

At Parsus Law, our services go far beyond the scope of a traditional corporate law firm. With our wide range of experience and passions, our legal team is equipped to support your business in all aspects of corporate law, including mergers and acquisitions. We are the corporate law firm you’ve been looking for. Contact Parsus Law today for a confidential consultation and to learn more.