Mergers & Acquisitions

Some business owners put off considering the sale of their business for good reasons. Mostly, owners are active and want to continue managing beyond hypothetical retirement age, the business salary and cash flow sustain an active life style in addition to owner investments, concern about acceptable market price, tax consequences, and, there’s no family member interested in taking over.

The Major Benefits or Advantages of Mergers

       Owner stays active

        Economies of scale to take the business to the next level.

        Tax benefits.

         Financial resources.

         Entry in global markets.

         Growth and expansion.

         Helps to face competition with diversification

         Increase in market share.

         Asset value appreciation

         Expanded research and development capability.

        Financial strength to add more merger targets.

Mergers rather than sales are increasing in popularity because selling the company plunges the owner into an area of diluted identity with no place to go to be in charge of anything.

A merger does requires thought, preparedness and good economic timing to be successful.

Mergers involve the mutual decision of two companies to combine and become one entity; it can be seen as a decision made by two "equals". The combined business, through structural and operational advantages secured by the merger, can cut costs and increase profits, boosting shareholder values for both groups of shareholders.

A typical merger, in other words, involves two relatively equal companies, which combine to become one legal entity with the goal of producing a company that is worth more than the sum of its parts. In a merger of two corporations, the shareholders usually have their shares in the old company exchanged for an equal number of shares in the merged entity.

No formula exists that dictates when and how to merge one company with another. But in general, the most successful mergers are conceived to strengthen performance and increase market share as opposed to saving a floundering enterprise. A merger needs to be looked at as an improvement.

In a general sense, mergers and sales are somewhat similar corporate actions - they combine two previously separate firms into a single legal entity. Significant operational advantages can be obtained when two firms are combined and, in fact, the goal of most mergers and acquisitions (sales) is to improve company performance and shareholder value over the long-term.

Several of our clients are interested in merging their companies with compatible businesses in our area.

To learn more, contact us on a strictly confidential basis;