Introduction to M&A

M&A Essentials: Your Quick Checklist

Thinking of buying or combining with another company? Here’s what you need to know.

1. Definitions:

• Merger: Two companies combine to form a new one. (Usually equals).
• Acquisition: One company buys another. (Buyer is dominant).
• Why care? Different legal and financial implications.

2. Why Do It? (Motivations)

• Synergy: Is 1+1 going to equal 3 (or more)? (Cost savings, revenue growth).
• Growth: Faster expansion into new markets/products.
• Tech/Talent: Acquiring specific skills or IP.
• Competition: Buying a rival.

3. The Process (Simplified)

• Strategy: What do you want to achieve?
• Target: Who should you buy?
• Due Diligence: CHECK EVERYTHING about the target (financials, legal, operations).
• Valuation: How much is it worth?
• Negotiation: Agree on price and terms.
• Integration: Combine the businesses (hardest part!).

4. The #1 Reason Deals Fail:

• Poor Integration: Failing to merge cultures, systems, and people effectively.

Golden Rule: M&A is exciting, but it’s complex and risky. Thorough preparation and realistic expectations for post-merger integration are crucial.