What are some questions to ask before a merger or acquisition?

What are some questions to ask before a merger or acquisition?

On Behalf of | Jun 9, 2017 | Uncategorized |

Many successful businesses in Louisiana go through a merger or acquisition. However, mergers and acquisitions are complex endeavors. And, there are some steps businesses can take to make the process go smoothly.

First, the acquiring business should take the time to get to know the people behind the business they seek to acquire. For example, an acquiring business may want to run a background check on owners of the company and request references. Moreover, speaking to the business’s employees can help an acquiring business get a good idea of how the business they are seeking to acquire runs and how its leadership operates.

In addition, the acquiring business can talk to customers or clients. This includes not just current customers and clients, but also those who have left the business. Customer reviews can also provide a lot of information about the business.

Moreover, it can help to enlist the aid of a financial expert to review the accounts of the business. By reviewing at least five years of accounts, repeated mistakes or inconsistencies can be identified. It can also be important to learn whether the business has or had tax issues.

The acquiring business should make sure to get a good understanding of the day-to-day operations of the business it is hoping to acquire. What are the business’s operational procedures? Do the business’s employees abide by them? This is important information to know before deciding to acquire a business.

All of those involved in the merger or acquisition, from owners to shareholders, to workers to customers, should have a solid understanding of how the newly merged company will look and how it benefits them. It is especially important for those who will be working for the newly merged company to be in agreement with the company’s mission.

These are only some steps an acquiring business may want to take to make the whole process run smoother. To learn more about what questions to ask prior to executing a merger or acquisition, it can help to consult with an attorney.

Source: Forbes, “7 Ideas To Make Your Merger Or Acquisition A Success,” Bill Rader, May 30, 2017