The M&A process can be long and complex. Selling a company requires meticulous planning, experienced professionals, and an appreciation of the deal processes involved in negotiations.
Companies that have not been involved in previous M&A transactions commonly make mistakes that result in under-pricing, unfavourable terms or a failure to complete – which could have otherwise been avoided. Below is a key issue that sellers face when negotiating mergers and acquisitions.
Do not neglect the day-to-day operation of the business during the M&A process.
Acquisitions can distract managers and employees from their day-to-day roles because of the amount of time, energy and attention they take. As a result, customer experience is often overlooked which may deepen into growth and operational issues.
The problem with this is that if the selling company’s financial situation weakens during the M&A process, then it will alter the projections given to the potential buyer – which could then lead to a possible unfavourable renegotiation of the price and terms of the agreement, or even jeopardise the entire deal.
Therefore, the selling company must ensure that M&A issues do not interrupt day-to-day business and may wish to hire an M&A specialist to assist with this objective.
If successful in keeping day-to-day operations at the forefront during the M&A process, businesses are more likely to retain current customers and also set the company up for future success.
Management Advisors Pty Ltd is a highly sought after independent financial services firm. Their team has extensive experience in initiating, sourcing and negotiating M&A transactions to completion.
