Mergers & Acquisitions
We are growth management consultants with experience including:
- Advising on best-practice collaboration structures for tax and accounting purposes
- Performing due diligence for mergers and acquisitions
- Planning for successful mergers and post-merger integration
- Understanding the importance of culture and core values in bringing personalities together
- Helping you plan for maximizing your company’s value
- Advising on M&A exit strategies and valuation considerations
- Crunching the numbers to avoid being blind-sided by tax and accounting pitfalls
- Handling spin-offs, restructuring and dissolutions effectively
- Consulting on buy-sell agreements to incorporate tax issues
Questions to Ask Yourself
Review the Company’s goal in an exit given its likely future exit options and devise a strategy to achieve that goal. Where does the Company generate most of its value? Is it the valuable intellectual property, is it the team’s capabilities, is it the sales growth trajectory driven by a novel product or marketing strategy, is it the existing contracts and customer base, etc.? What is the best way to enhance that value to a likely acquirer, and what will it cost? Assess whether your current service providers can guide you in developing and implementing your plan.
Deal terms and structure can have an enormous impact on the ultimate success or failure in a business deal. Whether an earn-out or more fixed consideration in a deal is appropriate will determine the proceeds of a seller, and the investment of buyer. The suitability of continuing executive & employee agreements, stock-based compensation, deferred compensation, and severance agreements can make or break a deal. Accounting for M&A transactions is complex and will determine the investor and stakeholder perception of a deal. Finally, the tax treatment of M&A transactions is difficult and requires specialist consideration to maximize buyer and seller benefits. The offer or letter of interest is only the start of a complicated process.
Deal readiness is a combination of maximizing value and minimizing risks from a buyer’s perspective. Maximizing value is understanding where a buyer will find value in your business and focusing on that aspect of your business. Resources are always limited and should be spent where they will generate the most value to a likely buyer. Minimizing potential risk to a buyer is done by reducing, as much as possible for your industry/size/business, the risks that a buyer would incur in purchasing your business. Correct and complete financial statements, the proper level of assurance (compiled or reviewed or audited financials), reasonable and appropriate contracts with customers/employees/vendors, clean title to assets and intellectual property, proper tax reporting in all areas, and the correct business structure are key risk mitigation areas.
