Acquiring a pre-existing company in addition to selling numerous businesses is referred to as a merger & acquisitions (M&A). This can be an excellent method to extend your business or acquire another company. In fast-paced businesses or commercial sectors which are difficult to penetrate, buying an existing company or business is more practical than starting or growing a business.
As a lawyer, I have dealt with various people who are buying and selling businesses through mergers & acquisitions including spin-offs. With years of experience in working with a lot of clients in diverse industries, I was able to recognize some flaws of those who do mergers & acquisitions. Their faults can be found in the areas of finance, operations, and legalities. Obtaining an established business is not easy although this should not necessarily be difficult or complicated.
Fixed Mergers & Acquisitions Plan
Having a plan for transactions is essential in mergers & acquisitions. As a lawyer, I highly recommend that you should create a plan for a trackable and easier flow of actions. On the other hand, unexpected changes do happen from time to time so your plan should be flexible to be able to adjust easily to situations that are beyond your control. Most likely, you will close the deal this way since you were able to adapt to unforeseen changes.
Forming a Large Team
Seasoned buyers on mergers & acquisitions who are acquiring bigger companies tend to form a large team with many members and all of them participate in the whole process of M&A. Each team implements its own rules and guidelines that are sometimes complex and different from other teams. This results in chaos and some potential conflict since they impose varying procedures, yet they are only working on the same project. Also, it is hard to manage a big team since you cannot accommodate all their needs individually for the success of the project. It is best to have a small team that is more manageable and that leads to an excellent performance.
Buyers tend to lose focus when their attention is divided into many things. Communication is important when dealing with people in business. So, you must be in constant contact with your consultants and the sellers. Give updates on them frequently like calling them each week. Make your calls and scheduled meetings short to avoid using up too much time.
Not Choosing the Suitable Deal Arrangement
Whenever you acquire a business, it is possible to purchase the assets or stocks of an LLC to which the equity interest is often called a membership interest when there is no stock and it is labeled as partnership interest when in a partnership. Although the M&A applies to both mergers and acquisitions, most of the time the M&A is mostly acquisitions. The buyer can choose to buy a stock or an asset of a company. You should consult me first before taking any decision because I can guide you on what is the right action to avoid issues in the future.
When acquiring a company or business, you should be mindful of the mistakes committed by buyers to prevent you from doing the same. The mistakes I mentioned above are the most common ones that you need to be aware of. In case you are enthusiastic about mergers & acquisitions, want to know how to start a deal, or have an interest in business law, you can call me at (305) 921-0440 or email me at Romy@jflawfirm.com. You can choose what’s convenient for you. Just contact me and I am happy to extend a helping hand!