Thinking About an M&A? Consider These 5 Factors

As a business owner it is important to make sure you are always thinking about the future; specifically, how will you grow and expand your company to get the best results possible. In some situations, merging with or acquiring another business is a great opportunity. Before you move forward with any M&A efforts, however, you will want to consider some important factors that will help you to make the right decisions.

1. Financing the Merger & Acquisition
One of the first and most important things that you will need to consider is how the merger & acquisition will be financed. These events can be very expensive and will impact the financial stability of the business for years to come. There are a variety of options available, including:

Cash Purchase
Equity Funding
Debt Funding
Stock Buyout

2. Potential Overlap
When considering a merger & acquisition, a major advantage is the ability to grow and expand an existing business very quickly. If you are acquiring a competitor, for example, your business region will expand immediately and come with some existing customers. In some cases, however, your business and the new one will have some overlapping service areas. When this is the case, you may have to shut down existing locations, let employees go, or take other difficult steps.

3. Tax Implications
A merger & acquisition will impact many areas of your business, including the tax obligations. This type of business transaction is going to have a variety of tax implications that must be considered. In most cases, there will be both additional taxes that need to be paid, and opportunities for deductions. Having a good understanding of all tax implications before moving forward is critical.

4. Retaining Key Talent
Going through a merger or acquisition is going to have a major impact on virtually every aspect of the business. In some cases, this can cause existing employees with both companies to get nervous about their place in the business once the M&A has been completed. Taking proactive steps to retain key employees during this process will help ensure that it will be a success. Prior to moving forward with any M&A, make sure to think about how you will involve the employees, and what you can do to keep them happy.

5. Unique & Unknown Implications
There will undoubtedly be many important issues that are caused by a merger and acquisition that are specific to your business. In addition, there will be impacts that are unforeseen. Taking the time to think about exactly what you are taking on will help you to plan for the future. On top of that, having an advisor who can help you will be a great asset.

Attorney Carla D. Aikens will not only help you with the legal aspects of a major undertaking like this but can also serve as an advisor to help you throughout the process. Contact us to schedule a consultation to discuss this important event today.