Planning for A Merger or Acquisition

Oct. 19, 2018

For many companies in Illinois, acquisitions and mergers can be an important way to increase their value and profit-making potential. To maximize the benefits that can accrue from an acquisition, it is important to deal with a number of challenges that can arise. Bringing together two different businesses can require significant organizational changes to optimize efficiency and create a single working framework. However, by understanding the process more clearly, companies can make better decisions when deciding to come together.

Mergers and acquisitions begin with due diligence, where a company analyzes the other business to see whether it is a positive investment. This process also includes evaluating its technology, finances and intellectual property to determine a real value for the other company. Next, both sides must agree on the terms under which the acquisition will be carried out. In addition to the financial offer on the table, this agreement can include personnel decisions, organizational changes and inventory assessments. It can also create the framework for communicating with customers and others outside the companies about the benefits of the merger.

After the agreement, the practical work begins as the two companies proceed their integration and select systems, vendors and resources that meet the needs of the newly merged entity. Change management can include a planned schedule for how the full process will be carried out. The goal of all of this is to maximize value, reduce costs and emerge as a stronger company. By planning well and developing a clear strategy, companies can attain the most value from their acquisitions.

When businesses think about their next steps, a corporate law attorney can be a critical resource and advisor. An attorney can be critical to the due diligence process and the negotiation of a fair agreement that leaves a business in an advantageous position.