Many entrepreneurs who have created successful businesses dream of being bought by a larger firm that will take their company to the next level. Mergers and acquisitions (M/As) are exciting, but also complicated. A successful merger requires focus and planning in three primary areas: legal, financial and process.

Create a Strategic most popular financial blogs Goal

Before they begin their search, it’s crucial that the buyer determines why they want to buy the company. The reason shouldn’t be general or vague, but rather complement the goals and goals of the company. This should be the basis for all decisions regarding the search, including how wide or narrow to be the scope of the search.

Conduct a Search

Corporate development teams can use LinkedIn and industry association lists to find companies that meet their requirements. Teams should also take into account the various factors that can influence the cost of an acquisition, including the performance of the acquired company in its market, the competitive position it has as well as the health of its assets, such as intellectual property, physical assets and cash flow revenue.

It’s a great idea to employ an M&A consultant or adviser to assist in the negotiation. It’s not unusual to receive several bids at this point. At this stage the seller should be careful about what details they give prospective buyers. Too much information could create antitrust issues and threaten a sale.