Business Acquisitions
One of the primary goals of most businesses is growth. Of course, other common goals include marketplace innovation, creative expression, and community improvement.
Common ways to grow your business (aside from simple market expansion) include making a strategic acquisition or merging with another business. An acquisition is when you buy another business and end up controlling it. A merger is when you integrate your business with another and share control of the combined businesses with the other owners. Mergers and Acquisitions are both ways to acquire new business opportunities.
ADVANTAGES OF MERGERS AND ACQUISITIONS:
There are many good reasons for growing your business through an acquisition or merger. These include:
1) Obtaining quality staff or additional skills, knowledge of your industry or sector and other business intelligence.
2) Accessing funds or valuable assets for new development.
3) Increase overall business performance.
4) Accessing a wider customer base and increasing your market share.
5) Diversification of your business’s products, services and long-term prospects.
6) Reducing your costs and overheads through shared marketing budgets, increased purchasing power and lower costs.
7) Reduced competition; and
8) Organic business growth.
Due Diligence
Business entrepreneurs tend to like the thrill of the jump. Good opportunities are often seen as fleeting. Still, being overly hasty and entering into an acquisition arrangement without proper investigation can lead to serious long-term complications–not to mention wasted money. It is essential to understand the background and risks of the business you are considering acquiring. Your business lawyers will be indispensible in helping you organize and implement an effective due diligence strategy. Such a strategy will not only include thorough background investiagtions, but also appropriate documents in the transaction.
Please contact us with any questions you might have about business acquisitions. We’ll be glad to help.