M&A: Mergers & Acquisitions or Misery & Anxiety? - 22nd May 2017

By: Colin R. Stone

We all read about the latest acquisitions of the major companies, we hear about the successes and failures at a mega-financial level.

In the corporate boardroom, teams of specialists plan and implement a well-defined strategy to achieve their goal, be it acquisition or divestment.  Properly executed, the plan will have a high probability of success. However, even after months of planning, things never quite follow that expensive planning process.

M & A specialists, Accountants, Lawyers, Human Resource Professionals, Technologists, Sales and Marketing Executives, Industry Specialists all have a part to play, interacting, within the organisation, and externally building relationships with the targets companies. It is difficult to put a price on the internal costs, and particularly when you consider the man-hours of these highly paid professionals.  These costs can be duplicated within the target companies, too.

Is success a foregone conclusion? There are many potholes en route to success.  The process is complex, demanding and time consuming.  Companies, in whatever form, are complex living entities.  If one part of the company machine is overlooked its working can grind to halt. A well-executed strategic plan greatly reduces the failure rate to reach agreement.  These statements are not unique to the big boys in the business. The same drivers that steer corporations are present in all business environments. However, the SMEs are not in the position to employ and maintain teams of specialists to undertake such processes.  So when a decision is made to divest or buy within SME community, the responsibility falls on the desk of the key decision maker.

Consider the situation where the major shareholder of a successful private company is also the Chairman and Managing Director and, probably, Agony Aunt.  This individual has spent 30 years:
•    Enjoying the challenge of maintaining the company
•    Dealing with the ever-changing business climate.
•    Day to day issues together with a concern for the long-term future of the organisation.
He or she may be second or even third generation family.  The company has a strong balance sheet.  It has successfully continued to show healthy profitability.  
However, the realisation that there is no obvious successor often looms large. The options are often very limited:

Finding an heir apparent, retiring and sit behind the scenes worrying about your life’s investment, hesitating to take large dividends.
Selling the company.

Easy you think, the decision is simple - sell. So how to start this simple process. At this point it is useful to reflect on the planning that goes on at a corporate level.  After all, those issues faced by a multi- million pound corporation, will land on the desk alongside the day-to-day in-tray.

So, the first step is to make a to ‘do list. Making a list to get the process off the ground is easy. Then build in the need to maintain confidentiality within the organisation and from your competitors, all add to the process.

An empirical guide includes:
•    Decide on a company valuation.
•    Compose a list of potential buyers.
•    Approach the owners or key decision makers.
•    Agree on a confidentiality agreement between the two parties.
•    Make a selected short list.
•    Prepare and share data on your company.
•    Past Audited accounts
•    Five-year Plan
•    Staffing, including salaries and pensions
•    Keeping your loyal staff intact
•    Environmental conformity of the business
•    Resolving any problems with the Tax Authorities
•    Settling internal and external disputes.
•    Decide to continue with your Patent Application
•    Continue to fund a sure success development.
•    Gather all the data from the above.
•    Inform your bank
•    Stretch your lawyers capabilities
•    Prepare a confidential data room.
•    Post acquisition integration.

Where do you start?

One answer is to work with specialist service companies like Baird Partners. We will advise and devise a unique customised plan which will provide guidance to get you to your goal in an efficient and cost effective manner. Working closely with you, its specialists will customise the plan to suit your organisation working with both national and cross-borders buyers or sellers. Where specialist advice is required (Legal, accountancy, environmental compliance etc.) suitably qualified companies can be recommended. Introduction to investment groups, advice on MBOs. Bolt on deals with interested corporate bodies and other SMEs can be part of the plan. Baird Partners will maintain your confidentiality until it is timely to bring you into view. As you can imagine, this has many advantages. You will be, of course, part of the team.

Whether selling or buying, joint venture or funding, this planning process can be applied for companies looking to either sell or buy a business.
Is it time to realise the true value of your company and sell or go forward and expand that already successful organisation?

Contact Baird Partners, and we will arrange to meet with you and discuss your own individual situation.

Back to Articles

Request a call back

Whether you're thinking about selling your business, making a strategic acquisition, or need to raise finance for your business, Baird Partners can help. Request a callback or send us a message today.