You’ve determined that it is the right time to sell or merge your company!
So we’ve developed this short list of potential questions that we could discuss with you when you’re looking at a possible sale, merger or acquisition.
- What is the firm’s primary reason for a merger? Increasing profits, expanding services, extending geographic coverage or pursue other opportunities.
- What size and type of business would be appropriate to target and would deliver on our growth plans?
- What is our access to financing/capital and how much debt are we willing to absorb?
- What are the risks of not doing anything differently – what does the next one-to three-year time horizon look like given the current state, financially and operationally of business?
- Does our firm have effective leadership? Does the merger target have one? The new, combined firm will need this component to succeed. If both firms are lacking strong leadership, then you will need to find someone new to lead the merged firm.
- What are our operational strengths, and how could we leverage them in a merger and what industry knowledge and expertise would we bring to a related business?
- Can we create economies of scale with our fixed asset base and operational infrastructure, i.e. lower costs resulting from a combination?
- What is a reasonable growth rate target and return on investment objective that would satisfy the owners/shareholders?
- How strong is our brand/trade name? Is this goodwill an important consideration in an acquisition? Does the target have a strong brand?
- How will you communicate the coming merger to staff? Telling key people as soon as possible is important, before the rumors begin. One-on-one discussions, memos, and “town hall” meetings are ways to let people know what is going on. Decide early who you want to retain and work to keep them?