Whether you are buying a business or selling one, business mergers and acquisitions are not like purchasing assets or getting a new client. The process is long and requires a lot of paperwork to sift through, but even more important is the due process, in which you have to make sure that you are getting what you are paying for—or that the person buying is going to pay for what you provide. Perhaps mergers and acquisitions are simply part of your growth strategy now.
Regardless of what the case is, you might need to hire or deal with business acquisition experts, and if you are, there are a few things you must know about them.
Mergers and Acquisitions
While one might think they are similar, mergers and acquisitions are quite distinct from one another, but this interchangeability largely stems from how one terms merger and acquisitions. In technical terms, a merger is one when two companies—larger or smaller than each other—come together to form a single, new entity. New stocks are issued, and the stockholders get stakes in the new ones. The names and legal trademarks are put in the name of the new company.
An acquisition, on the other hand, is when a larger company acquires the majority shares of a smaller one. In most cases, the smaller company (the one being bought) becomes a part of the larger company or simply has its assets sold. However, not all mergers and acquisitions are friendly, and while the term should be ‘hostile takeover,’ most corporations agree that this would generate a less desirable public sentiment against them.
However, most companies even refer to acquisitions as a merger—even when no new company is formed. That is simply because it has become an industry norm, but due to its technicalities, buyers, and sellers should always know the difference. The importance of this fact here is that you can have a business acquisition expert for your mergers as well.
What You Should Know About Business Acquisition Experts
The most important quality of any business acquisition expert is that they do not treat these matters as mere transactions. You are not simply buying or selling a business, and what happens throughout the process is not meant to simply facilitate the transaction. Instead, the transaction (and everything else) is a part of the merger itself. The transaction is simply meant to be the final confirmation of it happening.
In fact, mergers and acquisitions should be treated as a relationship-building exercise, and that is one of the responsibilities of the business acquisition expert. If you are looking for one, an experienced expert might have a history of long-term relationship-building with both buyers and sellers. An acquisition expert can very much facilitate a transaction, collect a fee, and move on. However, any corporate businessperson knows that building client relationships is just as important as the sale itself.
All that is necessary because trust is the bedrock of any relationship, whether it is B2B or B2C. If, for example, you are buying a business, you are not just taking on its assets and employees but also all its debt, its loans, its current financial situation, and the added prospect of employees who are worried if they will be kept or let go.
Getting M&As Done Right
These experts you hire should not just be experts in M&A (Mergers and Acquisitions). But also have adequate knowledge of both the buying and selling parties, the industries they operate in, and whether a merger or acquisition is beneficial. They also have to do that, all while ensuring mutual benefits for both parties.
Hiring someone for consultancy is necessary whether you are an experienced business person or someone. Who simply wants to sell their business and retire. The process is entirely too complex, and hiring someone else to scrutinize it can help discover errors. And fix them before they become a financial—or, more importantly, a legal—issue.
Most of the issues occur due to poor planning, not enough time, miscommunication, lack of data, a lack of understanding of data, limited information on the business, lack of tools and processes to help with the M&A, etc., just to name a few. They don’t happen in a vacuum, either. Multiple problems can occur simultaneously and quickly compound into much more.
Hiring a Business Acquisition Expert
Suppose you have decided that you want to buy or sell a business. And that you also want a business acquisition expert to go along with it. But how exactly can you evaluate the best candidate for you?
Well, first, you have to consider if you are hiring them for a single deal or full-time. Some companies have mergers as a growth strategy. So they might want a salaried role with commissions based on the deals they bring. This role might be specific to a business acquisition manager. But all that largely depends on the company and its goals.
These managers and experts have to bring in new opportunities for acquisitions, evaluate them, negotiate the terms of the contract, etc. However, the more important part of the role is managing records, maintaining reports. Ensuring that any data needed is provided to the buyer/seller. Sometimes, a merger doesn’t involve any exchange of money at all, so different deals are handled differently. But in all of them, keeping good track of all documents. And financial aspects of a company is necessary to ensure there is no legal trouble.
In terms of evaluating them as an individual, you may need someone with business acumen and etiquette first. Remember, you are not looking for someone with sales experience. But rather someone who has the ability to understand business deals and come up with a mutually beneficial outcome. If you are hiring them full-time, you can evaluate them. But the person responsible for all that would be your internal talent acquisition team or HR department.
Business acquisitions and mergers are complicated deals with simply too much detail for a business. Owner to be able to perfectly handle and understand it. However, with a business acquisition expert, you can make all that a bit easier.