Some businesses wait for years to expand their operations from within. Others find that the fastest and most direct strategy for growth is through mergers and acquisitions. Mergers and acquisitions happen in all industries, but the process is delicate, complex, and time-sensitive.
The Benefits of Mergers and Acquisitions
Mergers and acquisitions offer a variety of advantages to all parties involved. First, the increased customer base allows a business to boost revenue without trying to court them away from a competitor. Second, mergers and acquisitions add assets to a business. Property, equipment, vehicles, and more come as part of the transaction, reducing the need to spend more to expand their operations. Beyond hard assets, management teams and employees are included in mergers and acquisitions, so operations can grow without much disruption. Third, brand recognition comes with a merger or acquisition. Whether one company keeps its name or a new identity is formed, existing customers will be aware of the transaction, and will continue their relationship with the business.
Analyzing Mergers and Acquisitions
Mergers and acquisitions require an eye for detail to ensure the transaction is profitable, as well as analyzing any unwanted items that can be trimmed away in the process. Analyzing a business merger or acquisition uncovers:
- Liabilities: A fiscal analysis can help determine if a business has outstanding debts, IRS tax liabilities, and other factors that can be major detriments to a merger or acquisition.
- Equity Value: From investments and holding to equipment, patents, trademarks, intellectual property, and more, understanding the equity value of a business can help decide whether a merger or acquisition is profitable.
- Redundancies: Mergers and acquisitions sometimes result in a surplus of equipment, supplies, and even staff. Taking account of these can help businesses allocate, restructure, or let go of redundancies before the transaction is finalized.
Funding for Business Mergers and Acquisitions
Mergers and acquisitions require funding to maintain existing operations, finalize the transaction, and make the transition to a larger, more robust entity to keep forward momentum. There are SBA loans that provide financing for mergers and acquisitions, but for larger transactions, businesses need funding that can be scaled to meet their needs. GM Capital Group offers financing solutions for mergers and acquisitions with up to 100% LTV. If you are lining up a merger or acquisition contact our offices today.
