It is easy to become caught up in the buzz surrounding mergers and acquisitions. But there are a number of crucial steps a company has to be able to follow to successfully complete an acquisition. A successful M&A requires careful planning, a clear communication strategy, and diligent execution.
Start with a strategy. Many companies advance myriad reasons for pursuing an acquisition–purchasing international scale, filling portfolio gaps, building a third leg of the business–but the most successful acquirers have specific and well-articulated ideas about how their acquisitions will create value.
Establish an organization. The M&A team should include members of the executive management image source and boards of directors of both the target and acquiring companies, as well as outside advisors experienced in acquisitions. The team will work to determine the goals of the sale, design candidate targets, and screen potential buyers.
Conduct an in-depth due diligence. Buyers frequently request extensive documentation and interview several people before settling on a deal. It can take a long time for the buyer to finish their evaluation, therefore sellers should be prepared to give information promptly and aid in the process as much as they can. Once the due diligence process is complete the seller should seek the final approval of the board to move forward with the transaction.
Develop plans for integration. It is important that the buyer has a team leader who is capable of devoting significant time and effort to the integration. This person must possess the necessary expertise and resources, as well as the ownership in order to ensure the smooth transition.
