What does M&A mean in business?

Mergers and acquisitions - are very effective instruments for rapid growth and development of the businesses. This is a strategic initiative that includes combining the possibilities of two or more companies in order to create a bigger and more successful business. The main reasons for such financial activities would be a great increase in the level of profits, the size of the market share or a reduction in costs. 

Benefits of M&A for small businesses may have synergistic effects - that means that the value and capabilities of the new company, that would appear as a result of a merger or acquisition, would be far bigger than the sum of such characteristics of the initial companies.

If you are a small business owner or a beginning entrepreneur, and you think that your company may benefit from merger - you should look for a professional opinion. As an option you may reach out to mergers and acquisitions experts at Valley Biggs - with their experience and deep knowledge of the industry, you would be able to ensure the best conditions in case of a potential acquisition or consolidation.

The main types of M&A

There are several types of mergers and acquisitions that are available for the business owner that have different conditions and benefits that are covered by the term M&A.

How long does the M&A take? What would be the name of the combined company? And what would be the management structure? These are the questions that are answered by the type of the merger deal:

  • Mergers. This is the type of the deal that helps two companies combine their assets in order to improve their position on the market. As a rule mergers happen between businesses that are similar in sizes. In the end one of the companies acquires assets of all other participants. This type of deal helps to preserve the value of the name and the reputation of the company.
  • Acquisitions. With the help of acquisition one business buys out the other participants of the deal. This could be done in two different ways - the buyout of the whole company by purchasing all the stocks or by purchasing the assets of other companies without involving the stock-market.
  • Consolidations. The main difference between M&A VS consolidation would be that in the result of a consolidation there would be a new company formed with all the combined assets, while with the merger one of the companies acquires physical and intellectual property of other participants.

What would happen to the employees of the companies?

One of the main concerns of the business owner before the beginning of the process of merger is the potential impact of M&A on the employees. In order to conserve the main talents of the company and the level of productivity of the business as a whole as well as individual employees you should demonstrate care and appreciation and address their main fears head on:

  • Fear of losing a job.
  • Changes in corporate culture.
  • Changes in management team.

This may be done with preserving the trust of the collective by communicating in timely and open manor, involving your employees in the process of discussions and decision-making, as well as allocating resources for future retirement benefits, stock options as for the employees that would stay and for those who might have to leave your company after the merger.

How to merge your business successfully?

If you are interested in mergers and acquisitions and think that it might be the right future for your company you may find next advices useful:

  • Choose potential partners for merger wisely. You should look out for possible synergies - what products, markets, possibilities and products may compliment one another and help drastically increase the level of profits for the united company.
  • Take your time. No historical M&A deals have been conducted in a day or even a month. There is no need to rush such an important decision.
  • Due diligence and risk assessment are essential prior to these kinds of deals.

And the most important tip - hiring a professional would save you time, money and nerves. For example, specialists from Valley Biggs have tremendous experience in mergers and acquisitions for technology and internet companies - with their help you would be able to ensure the best possible deal for you, your business and your employees.