Mergers and acquisitions (M&A) and corporate restructuring are a big part of the corporate finance world. Every day, Wall Street investment bankers arrange M&A transactions, which bring separate companies together to form larger ones. When they're not creating big companies from smaller ones, corporate finance deals do the reverse and break up companies through spinoffs, carve-outs or selling off divisions. Beyond M&A, most marketers miss out on huge chunks of available profits by not doing enough joint ventures. It’s the easiest way to leverage on resources you wouldn’t otherwise have. Fear of dependency on a new partner and having to share operating control are the two most cited reasons for not using joint ventures.
In any merger or acquisition planning you need to understand what you are getting into (Do I go ahead? Adjust the price? Walk away?). This is your one shot to understand the business before you close the deal. You also want to reduce any post-acquisition surprises (what will we need to work on after acquisition; integration issues, personnel issues, obsolete equipment requiring replacement, warranty exposures, major contracts, customer base). An important key to remember is “It’s not only the numbers!”
In joint ventures, you need to pursue and understand strategic analysis before you commit (what are you trying to accomplish through the joint venture; does this really meet long-term strategic objectives?). For international joint ventures you must understand the local culture (identify risks, personnel issues) and make sure you understand how you must do business in that local environment. You also need to ensure the joint venture is aligned with your company’s Corporate Strategy (What problems may occur in integrating the joint venture into your business?). It’s also important to understand the specific competitive environment that the joint venture will be operating in as well.
Getting a transaction completed is only half the battle. Much of senior management's attention must be focused on developing a post-transaction strategy and integration plan that will generate the revenue enhancements and cost savings that initially prompted the merger or acquisition. Since time is money and competitors do not stand still, integration must not only be done well but also must be done in an expedited fashion.
Are you considering selling or buying a business? Or maybe you are about to enter into a joint venture or strategic alliance. You can do most of it yourself without the use of high priced professional service firms. We have everything you need to source, analyze, value, investigate, propose, negotiate, complete and integrate the deal.
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