Mergers can make sense to be on the winning side of industry rationalization or as an effective way for two organizations to gain economies of scale and achieve a boost in performance. A merger can achieve these outcomes with minimal need for bank debt or investor funds.
However mergers have their own particular challenges and need adroit management to achieve a successful outcome.
We have initiated and project managed a number of mergers.
Typical Issues
- Keeping good communication to address many of the key issues below
- Gaining agreement on the key management positions
- Gaining agreement on board positions
- Gaining agreement on the process used to determine relative enterprise values and the result
- Agreeing the structure
- Agreeing the name of the entity
- Agreeing the key location and having all comfortable that an objective process will be used to determine this
- Being “real” about he benefits and doing the merger for the right reasons
- Managing egos and maintaining trust
- Understanding funding requirements, current and future
- Merger plan – roles and responsibilities
Our Process
Our process includes the following stages
- Planning
- Strategic Planning
- Market Study
- Candidate criteria
- Preliminary pricing matrix
- Options and risks
- Self / Inter-organizational assessment
- Identification/ Qualification
- Solicitation/ Positional agreement
- Self/ Inter assessment
- Synergy identification
- Execution
- Financial modelling
- Form of relationship/ Transaction structuring
- Due diligence, including synergies
- Negotiation and contracts
- Settlement
- Post-acquisition
- Tactical objectives/ integration
- Best practices (e.g. Peer groups)
- Synergies First 100 days
- Synergies – 100 days+
- Planning
