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Mergers and Acquisitions

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Mergers and Acquisitions

Many business owners dream about growing their business. Sometimes it’s the desire for greater financial rewards, and sometimes it’s the emotion of building something large and successful. That growth can happen either organically, by finding more customers and building your business internally, or by buying other businesses. Both can be done successfully with proper strategic guidance. Organic growth often means more work and takes longer to accomplish. Acquisitions can be a profitable shortcut for some organizations, but they can also load up a company with debt and create other risks of integration and the merging of systems and corporate cultures.

Sometimes owners are looking for an exit strategy. They might be ready for retirement after working hard to grow their business over 10, 20 or 30 years. Maybe they don’t have a family member to take over their business. They are then looking for someone to buy it, in effect doing a merger where they are absorbed by another company.

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Our Experienced CFOs Will Assure the Success of Your Acquisition

These are all unique circumstances that most owners face only once in the life of their business. There are many missteps that can be made. Many potential pitfalls in finding a business to buy. Are you better off buying a competitor, or finding a complementary business? How do you decide which business to buy? Should you buy a distressed business you can put on the right track, or one that is healthy and a good fit for your current business? What about the negotiations and the contracts? Do you just negotiate a flat sales price, or should you negotiate an earn-out based on your helping transition the business after the sale? What kind of multiple should you ask for? A multiple on what, EBITDA? What does that number end up being? How do you integrate new employees into your operation? How do you merge their current benefits plans and payroll packages? What additional costs are associated with a business that’s in a different city or state? What synergies can you achieve?

And those are only a few of the issues that you need to address. A skilled CFO has spent time working with all of these issues. They can put together the models to paint different scenarios that can show the possibilities or risks of various outcomes.

Mergers and acquisitions can be an excellent way to boost a company’s growth, but they also come with numerous risks. The skilled executives at CFO Simplified are ready to help you analyze the options so that you can make the right decision, based on your ultimate desires and goals.

 

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