As your M&A advisor, Boxelder can ensure that merger or acquisition progresses as smoothly and beneficially as possible. Advisory services that fall under the M&A umbrella include business valuation, negotiation, document preparation, and a variety of others. Having an experienced team in your corner will help you navigate this often complex process.
What to know about M&A
Due to the requirement to establish a new entity, as well as the need for both companies to have a strong cultural connection to complete the merger successfully, mergers are less common than acquisitions. In some — but not all — cases, the shareholders of the buyer and the shareholders of the seller will have an equal stake in the newly established company.
In an acquisition, the buyer purchases the assets of the seller, and a new entity is not formed. The seller is simply absorbed completely by the buyer.
The term acquisition implies a completely voluntary agreement, and acquisitions typically can be characterized as such; however, there is a subset of acquisitions – referred to as hostile takeovers – which are less than completely voluntary. Hostile takeovers can occur when the buyer directly purchases shares of the seller through the shareholders or secondary markets. After a certain point, the buyer has enough influence to effectively compel an acquisition agreement.
While hostile takeovers are technically acquisitions, most acquisitions involve agreement and cooperation between both parties. As with mergers, your particular type of acquisition will depend on the circumstances of your case.
What are the different types of mergers and acquisitions (M&A)
The term mergers and acquisitions actually refers to a broad range of transactions, all of which involve the unification of previously distinct entities.
- Mergers – two companies agree to merge, forming a single entity.
- Acquisitions – a buyer acquires a majority stake in a firm, which doesn’t change its name or legal structure.
- Consolidations – a new company is created from an agreement between two existing businesses, with each side receiving equity shares in the new company.
- Tender Offers – one company agrees to purchase the outstanding stock of the other firm at a specific price.
- Acquisitions of Assets – one company acquires the assets of another business, typically occurring during bankruptcy proceedings.
- Management Acquisitions – the executives of one company purchase a majority share of the stock in another business, making it privately owned in the process.
As you can see, M&A covers a notable range of activities. Knowing which one is appropriate for your situation and understanding how to navigate the process associated with it requires expertise. Speaking to an experienced M&A advisory firm such as Boxelder will give you the valuable support you need to navigate M&A with greater composure.
Expert M&A Consultants — On Your Team
Given the complexity involved with M&A transactions, it should not be surprising that a consulting firm can confer substantial benefits. An experienced M&A consultant can assist with everything from valuation to negotiation to document preparation. These services can have a very substantial impact on the course and quality of a given transaction.
Additionally, exiting a business is often one of the most significant events in a person’s life. After years of building and nurturing your company, entering the M&A market might be an emotional process — that’s why it’s critical to enlist the services of an M&A advisory firm, one that understands how to maximize the value of the company you’ve spent substantial time, energy, and resources growing.
The M&A process can be a minefield to navigate without the right firm in your corner. The team at Boxelder Consulting can help you conduct a smooth and financially beneficial transaction. Reach out today for a free consultation.