Mergers and Acquisitions

Mergers and Acquisitions (“M&A”) involve the process of one company purchasing or merging with another company. Mergers and acquisitions are strategic moves that many executives either have considered or will consider at some point as a leader of their company. A merger or acquisition can be a risky undertaking with many variables involved for a company, making it absolutely crucial that any M&A decision is fully evaluated, prepared for, and managed. BBG offers a variety of services to ensure this process goes as smoothly as possible for our clients, including our comprehensive Mergers and Acquisitions Toolkit found below.

The Mergers and Acquisitions Timeline

Strategic Planning

The first phase in any potential merger or acquisition, strategic planning is a crucial step that serves to identify the viability of any M&A move. Strategic planning includes analyzing your corporate strategy, establishing a comprehensive workforce plan, reviewing your business model and establishing a risk tolerance for the company.

Seller Screening

Seller screening includes thorough research into the seller’s corporate strategy, business model, corporate culture, and assets in order to evaluate the prospective fit with your company.

Due Diligence

This final phase of pre-announcement M&A preparation includes an in-depth analysis of seller exposures, both present and historical, along with an informed estimation of seller business potential to determine a target purchase price or valuation for the acquisition.

Transaction Completion

Once due diligence has been completed, negotiations begin and a contract is drafted to align with the findings of the buyer’s research.

Corporate Integration

The final step of a merger or acquisition, this phase is ongoing in nature. Management of the business combination process must minimize risk and strive for a smooth integration of company cultures, assets, and human resources.

Essential Aspects of Mergers and Acquisitions

Hidden Risks

In today’s business climate, mergers and acquisitions have more condensed timelines than ever. Many executives are tempted to rush the due diligence review in an attempt to wrap up the transition before the opportunity passes. Certain past and current liabilities of the seller may be overlooked, resulting in a deal that the buyer may question down the road when it is too late to take any corrective action.

Unanticipated Costs

Mergers and acquisitions are complex transactions that can carry long-lasting implications for your business. In addition to viewing the direct, or up-front costs, it is important to consider possible indirect costs. Indirect costs often manifest months or even years after the initial agreement. Employee perception of the deal can significantly impact satisfaction and retention, and deals of this complexity tend to take significantly longer than the interested parties may initially expect.

Insurance

In any corporate merger or acquisition, it is crucial that both the buyer and seller review and update all insurance coverages to ensure all risks are fully accounted for. Identify any possible exposures that could arise if operations are added to your company, or operations are moved to locations unfamiliar to your company. Talk to one of our M&A specialists to see whether Representations and Warranties Insurance or D&O Run-off Coverage would be a wise acquisition to minimize your risk during the transition.

Resource Management

Your company’s resources, both human and technological, are important considerations during a merger or corporate acquisition. Employees may understandably feel uncertain about their job security, any changes in management or management style, or cultural differences between the two companies. Additionally, major corporate transitions often include sizeable data transfers and the development of new security policies, making your company’s data extremely vulnerable. Effectively managing your company’s resources both before, during, and after any merger or acquisition is essential to avoid any unanticipated consequences.

Your M&A Partner

There are many steps any executive should take to prepare for a successful merger or acquisition, and BBG can help. Our team of experienced benefits consultants, HR specialists, and executive strategists can help you plan effectively, execute quality due diligence and minimize your risk throughout the process. To get started, click below to download our comprehensive Mergers and Acquisitions Toolkit, filled with over 30 pages of helpful advice, insights, and recommendations straight from our team of experts. Let’s build a prosperous future for your company, together.