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13 Crucial Steps to Prepare Your Business for a Merger or Acquisition


— November 27, 2023

A crucial step in preparing a business for a merger is change management. You need to plan and implement a change-management strategy. ~ Perry Zheng, Founder and CEO, Pallas


To provide you with the most comprehensive guide on preparing a business for a merger or acquisition, we’ve gathered insights from thirteen top professionals, including CEOs and founders. From securing recognized professional standards to informing the public in advance, these leaders share their crucial steps to ensure a successful merger or acquisition.

  • Secure Recognized Professional Standards
  • Plan for Post-Merger Integration Early
  • Conduct Thorough Legal Due Diligence
  • Consider the External Market
  • Value Your Human Capital
  • Optimize Tax Reports Post-Merger
  • Document Pre-Merger Revenue Figures
  • Involve M&A Experts
  • Form a Post-Merger Integration Team
  • Implement a Change-Management Strategy
  • Ensure Legal Compliance in Valuation Analysis
  • Perform an Exhaustive Evaluation
  • Inform the Public in Advance

Secure Recognized Professional Standards

In the intricate dance of mergers and acquisitions, preparation is paramount. One often overlooked, yet critical, step is ensuring that the business meets all professional standards and qualifications. In the UK, for instance, possessing certifications like the ISO (International Organization for Standardization) can be a game-changer.

Achieving ISO certification, among others, not only attests to the operational excellence of a business but also significantly elevates its appeal to potential acquirers. It signals a commitment to quality, consistency, and continuous improvement. 

In my tenure running a digital agency in the financial space, I’ve observed that businesses with such qualifications often command higher valuations and experience smoother acquisition processes. Before entering the M&A arena, fortify your business’s position by securing recognized professional standards. It’s an investment that invariably pays rich dividends.

Shane McEvoy, MD, Flycast Media

Plan for Post-Merger Integration Early

The goal of any acquisition is to generate positive returns, whether it’s through acquiring revenue and market share, skilled team members, or technology and other assets. However, to generate any of these returns, the assets need to create synergies. That’s the part of post-merger integration.

In most acquisitions, post-merger integration is still an afterthought. The acquisition is completed, and then the related business units take care of the rest. Involving the business units early and creating clear workstreams for the post-merger integration is key early on and should be part of any M&A process.

Tobias Liebsch, Co-Founder, Fintalent.io

Conduct Thorough Legal Due Diligence

In mergers and acquisitions, conducting thorough legal due diligence stands out as a paramount step. This process involves scrutinizing contracts, identifying potential legal liabilities, and ensuring compliance with all regulations. 

By identifying legal risks and opportunities, businesses can make well-informed decisions, negotiate better terms, and ensure a seamless legal transition post-merger or acquisition. Legal due diligence not only mitigates legal risks but also serves as the foundation for strategic decision-making, ensuring the transaction complies with all legal regulations and requirements.

Michael Edwards, Partner, Michael Edwards Solicitors

Consider the External Market

Considering the external market is an essential element of preparing for a merger or acquisition, and it will inform the foundations of your move. This task can often be long term, and you’ll inevitably feel pushed to forecast market behavior to ensure the best result. 

The key is to take things slowly but also get very clear on your ideal output scenario—list those absolutes that could push you into action immediately. From there, it’s all about preparing for your ideal transition point.

Gates Little, President and CEO, altLINE Sobanco

Value Your Human Capital

Consider your human capital. Maintaining the acquired company’s existing team means having experienced professionals on your side for a smoother transition and lower costs than hiring and training brand-new employees from scratch. Considering the sheer cost and effort required during M&As, you’re setting yourself up for better success and showing old teammates that you value and care enough to ensure there’s enough space for them as you establish a new normal.

Gillian Dewar, Chief Financial Officer, Crediful

Optimize Tax Reports Post-Merger

Even though the financial aspect is the most examined during a merger or acquisition, the optimization of tax reports is often overlooked post-merger. 

Tax reports, especially, should be reviewed as the company would be regarded as one entity and, therefore, require a complete restructuring to comply with tax laws. This will prevent any future tax liabilities that may occur. There should be a clear definition of what the implications of the merger or acquisition are. Even employee benefits and due compensation are reassessed to make sure that the transition will not violate relevant tax laws.

Siva Mahesh, Founder and Finance Expert, Dreamshala

Document Pre-Merger Revenue Figures

Document your last revenue figures before officially merging with another company. This will come in handy when you’re trying to assess whether the merger was successful for your initial business. Typically, the goal of a merger is to help salvage sales and revenue by combining two businesses so they cater to a larger and more relevant audience. 

Not all mergers work, so it’s crucial to have starting figures you can reference if you notice this strategy hasn’t worked as you expected. It may indicate a need to reassess your integrated strategies or, if things don’t improve, to split.

Michael Nemeroff, CEO and Co-Founder, Rush Order Tees

Involve M&A Experts

One of my mentees owned a small flower shop, and it was recently acquired by a large chain store. My advice to her was to involve experts like investment bankers, lawyers, and tax advisors. 

While it’s possible to carry out all the due diligence yourself, it’s very unlikely that you, as a small- to medium-sized business owner, will have the accounting pedigree to spot every issue that may arise.

By bringing in these professionals, you can focus on what you’re good at, which is running your business and satisfying your customers while they can oversee the merger or acquisition.

Scott Lieberman, Owner, Touchdown Money

Form a Post-Merger Integration Team

I find forming a dedicated post-merger integration team to be crucial. This team should include representatives from both organizations and be responsible for overseeing the integration process. 

Having a dedicated team ensures that integration efforts are coordinated, milestones are met, and potential issues are addressed promptly. These are just a few of the crucial steps I’ve learned to be involved in preparing a business for a merger or acquisition. Each step requires careful planning and execution to maximize the chances of a successful and value-creating transaction.

Ian Sells, CEO, Million Dollar Sellers

Implement a Change-Management Strategy

Team meetings in open plan workspace; image by Proxyclick Visitor Management System, via Unsplash.com.
Team meetings in open plan workspace; image by Proxyclick Visitor Management System, via Unsplash.com.

A crucial step in preparing a business for a merger is change management. You need to plan and implement a change-management strategy. Such a strategy helps employees transition much more smoothly. It helps them adapt to the new processes and structure. 

This is essential because there is a lot of uncertainty during these times. A strategy that lays out exactly how the process will go gives them confidence and helps maintain productivity.

Perry Zheng, Founder and CEO, Pallas

Ensure Legal Compliance in Valuation Analysis

Conducting a valuation analysis is important in terms of examining assets, but it’s also critical that part of that examination focuses on their legal compliance. A business can possess an impressive portfolio that shows significant bonuses in the assets column, but if it’s in bad standing in compliance with legal or other jurisdictional obligations, it can quickly send those into the negative.

Ensuring that a prospective merger company is in legal compliance with all local codes, including operations, employment, and tax regulations, is vital in determining whether they are a good candidate to merge with your endeavor. By including compliance in your metric of analysis, you will ensure that a business’s current assets are safe and not subject to later devaluation, making it a more attractive merger candidate.

Ryan Rottman, Co-Founder and CEO, OSDB Sports

Perform an Exhaustive Evaluation

In order to adequately prepare a company for a merger or acquisition, exhaustive due diligence is a vital component. This requires you to perform an exhaustive evaluation of both your organization and the prospective collaborator. 

Arrange your finances, legal responsibilities, contracts, and prospective liabilities. It is of equal significance to thoroughly examine the financial position, operational activities, and legal status of the opposing party. This stage enhances the understanding of the potential hazards and advantages, empowering the individual to formulate well-informed judgments. 

Furthermore, the inclusion of seasoned legal and financial advisors is of immense value throughout this undertaking. Due diligence decreases the probability of unfavorable circumstances in the future and guarantees a more seamless transition.

Ahmad Faraj, Owner, Principal and Senior Criminal Lawyer, Faraj Defence Lawyers

Inform the Public in Advance

You must inform the public with enough time in advance that this merger is coming. This way, when you launch a new website with a new business name that reflects this merger, it will not confuse people or take them by surprise. If you do not prepare your audience for this change, you could lose engagement on this new website, which would hinder your SEO.

Natalia Morozova, Partner, Cohen, Tucker & Ades, P.C.

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