Even if you have put a lot of work into cultivating a positive, new relationship with a company you are going to acquire or merge with, much can still go wrong. Everything could be going smoothly one moment only for you to find that your deal is not going to go through as planned. Negotiating terms that can work for all of the people involved with a merger or acquisition can be a challenge.
Here are 4 things to look out for when you are looking to create a peaceful acquisition or merger.
1. Delays or taking too much time to broker a deal
Plenty of things can cause a merger or acquisition to fall through. One of the major causes of deals not being completed is when they are delayed for a long period of time. A quality agreement might not happen overnight, but there is a chance that one or more parties might start to lose interest if it takes too long to compile paperwork or if there is a lack of communication. This is why it can be important to have software such as a virtual data room installed since it allows both parties to share contracts and negotiations effectively.
2. Being inflexible with deal terms
Not everyone experiences the ideal situation when he or she is merging with or acquiring a business. It can be necessary for one, both, or all parties to be open to compromise and creating a deal that is approved overall. While there are some aspects of a deal you might want to remain firm on, others might need to be negotiated in order for the dotted line to be signed. Know which terms you feel strongly about and which you are open to changing before you go into making a deal.
3. Not having quality advice
One mistake many businesses make is not employing the right people to offer legal advice during a deal. Everything might look fine on paper, but the truth is that there could be some loopholes or vague language that could come back to haunt you later. Before you agree to sign anything, make sure to forward your contract to a legal professional to look over the details. This can save you problems with your newly-merged or acquired company in the future.
4. Lack of communication with business owners
Some business owners might be eager to sell their company, while others might be unsure about handing it over to someone new. This can also cause problems if you aren’t clear about how involved a former business owner will be once the company is in new hands. It can be beneficial to have a few counter-arguments practiced in order to reply properly to hesitant entrepreneurs who might not be ready to let their businesses go yet.
In conclusion
Communication with the company you are planning on acquiring or merging with can be key to a new start. By taking advice from the experts, you can broker a deal that ends up working for both parties while also creating a positive environment for your new company for the future.
Guest article written by: Alex Schnee