Mergers or acquisitions create large and tangible impacts on business, for the acquired, acquirer and the mergers. The process itself can be daunting and take up to 6-8 months of dedicated work, even for SMBs to complete the process. If you are at the cusp of a merger or acquisition, it is crucial that you are equipped with a focussed team that can help you execute your move with ease.
Here are a few key architects of a successful M&A operation.
The role of the project manager is an advisor – whether he is an investment advisor or a business broker, he will take on the role of preparing and executing the buying or selling strategy. This means organizing the business to perform comprehensive due diligence and making sure that the key stakeholders are informed and on board with the change in management. The M&A Advisor is the chief architect of the move and should have an expansive understanding of the targeted industry.
Investment bankers can sometimes take on the role of M&A advisor but their duty is to seek out buyers and sellers and use their market expertise to establish what a company is worth. It is also their responsibility to work out the scenarios of how a particular valuation can evolve and take into account all the special variables that could come into play during the process of a merger.
The biggest advantage they bring into the move is their market knowledge and ability to arrive at a fair price for the valuation. In addition to this, they can also take on the role of raising funds for the deal through selling shares or debt and even structuring the financials of the entire deal.
The role of attorneys kicks in during the due diligence process when they have to collate and evaluate the information. While most companies get legal counsels involved in the later stages of the deal, we suggest keeping them in the loop from the beginning. They help with structuring the transaction and advising on security law issues to foresee any red flags before the mergers get underway.
M&As can get heated in an inexperienced room and attorneys can be the sobering voices who can smooth things out. It is also their responsibility to comb through a company’s financial projections and examine everything from ownership interests and outstanding contracts to other legal liabilities that could sink the deal.
Tax attorneys are exclusively hired to understand the information from due diligence and see what role taxes play in the process. Their understanding of the revenue code can help in highlighting any tax complications that can arise in structuring the sale of a business. They can also identify any net operating losses the seller might have accrued or establish the buyer’s tax basis in the acquired assets.
The major role of accountants in an M&A is to ensure that the financial statements fit within the generally accepted accounting principles and make sure that the valuations are accurate. They are also helped by tax accountants who specifically assess how the decision can impact after-tax cash proceeds for the shareholders. Audit accountants, in addition to the other accountants, can ensure you have all the defensible earnings information.
The HR advisor plays a key role in ensuring that a seamless workflow is maintained after the M&A. It is their duty to analyse organisational culture for effective cultural integration. They are also responsible for boosting the confidence of employees while also providing the necessary training to managers to ensure they acclimatise themselves to the culture of the new organisation.
An IT head is responsible for syncing the several systems of the different companies to create or migrate into a more effective system that accommodates the operations of both the organisations. He is required to understand the various operations and create a common system that requires minimal change-of-understanding from employees.
Compliance advisors assess the companies’ risk profile to identify any possible compliance violations like violations of anti-bribery laws, sanction violations, data privacy rules and other regulations. These advisors are also to ensure complete adherence to other laws relating to ISO standards, the environment, hazardous chemicals, and international trade.
Board Members and Management
The most informed party in an M&A is you – a member of the management team. It is your responsibility to get an intimate understanding of the business and ensure that the synergy between management, employees, and stakeholders is maintained during and after the merger or acquisition. You are required to represent their key interests to the other architects and engage in queries regarding company culture as well.
In addition to this, the most important role you play in the M&A is interviewing and putting together an A-team of experts that can help you sail smoothly during the transition. All of this might seem overwhelming at first, but putting a team of experts together can make all the difference between success and failure. That is why our M&A services are created around taking on all the work for you. Our team of experts can ease the burden on your management to ensure success. Get in touch with us to know more.