STRATEGIC MANAGEMENT
Merger & Acquisitions for SMEs
M&A: Your path to growth and success
Are you looking to grow your business quickly? Mergers and acquisitions (M&A) can be a powerful tool for small to medium-sized enterprises (SMEs) to expand into new markets, acquire new skills, technologies, or products, and diversify your offerings. Our team of experts can guide you through the process, from valuation and pricing to post-merger integration.
Advantages and disadvantages of acquisitions:
Advantages of acquisitions: | Disadvantages of acquisitions: |
|---|---|
| Speed Acquiring another company enables a business to achieve an optimal production level faster than relying solely on organic growth. | Acquisition premium When a company purchases another company, it usually pays more than its current market value. A high premium could make the acquisition not profitable. |
| Benefits of synergies When a company acquires another, it can result in several benefits, such as increased revenue, reduced costs, and improved financial performance. These benefits are known as synergies. | Lack of control over the value chain Assets or staff may need to meet expectations in terms of quality.. |
| Acquisition of Intangibles assets Achieving brand recognition, building a reputation, fostering customer loyalty, and safeguarding intellectual property can be challenging through organic growth. | Integration problems Acquisitions often need help with integration challenges because each company has its unique culture, history, and operational methods. Additionally, there may be certain aspects that have been concealed from external parties. |
Reasons for failure of acquisitions:
| Paying too high a price for the target: | Management behaviour (psychological factors) may result in the target being overvalued by management. This is usually due to overconfidence, entrapment and agency issues. |
| Clash of cultures: | This is particularly true if the two companies have divergent approaches to business. |
| Uncertainty among Staff: | It is anticipated that there will be layoffs, and it is common for highly skilled employees to depart. |
| Uncertainty among customers: | Sales are declining due to customers’ concerns about potential issues after the acquisition. |
| Unanticipated problems: | Integrating information systems could be more challenging than anticipated, while the quality of assets or staff may need to meet expectations. |
How we can help:
Valuation & pricing:
We help you determine a company’s or asset’s value using methods like discounted cash flow analysis, market multiples analysis, and precedent transaction analysis. We also consider the benefits of synergies to ensure you’re getting a fair price.
Finance & strategy:
Our finance team ensures the deal is financially sound, while our strategy team develops a plan for integrating the companies and ensuring the deal aligns with your strategic goals.
Due diligence:
We investigate the company or asset before you make a purchase, reviewing financial statements, contracts, and other important information.
Motives, benefits & drawbacks:
M&A can help you access new markets or technologies, achieve economies of scale, and increase market share. We help you navigate the potential benefits and drawbacks, like cultural clashes, integration challenges, and regulatory hurdles.
Negotiation Techniques:
We use effective negotiation techniques to ensure both parties are satisfied with the deal. Some standard negotiation techniques include active listening, building rapport with the other party, and being willing to compromise.
Post-merger integration:
We help you combine the companies after the deal, integrating systems and processes, aligning cultures, and ensuring employees are integrated into the new organisation.
Restructuring models:
We help you improve your financial performance after the deal using methods like downsizing, consolidating operations, and selling non-core assets.
Exist support:
We provide services to companies looking to sell their business or exit an investment, including valuation analysis and transaction support.
Don’t miss the opportunity to prioritise strategic management and achieve long-term success. Discover how we can help you achieve your M&A goals and gain a competitive advantage by exploring the links below. Or, contact us today to learn how we can help you unlock your potential and confidently grow your business.
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