Mergers and Acquisitions: 3 Things to Consider

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There are many good reasons to merge your company with another company, or to acquire another business. Presumably you would do these things to strengthen your own company, and to help your shareholders and employees become more successful. It is not an endeavor to be taken lightly, however. Even if you are a small business acquiring an even smaller business, there are many legal and logistical things to consider. Here are three things to think about before you go ahead with that merger or acquisition.

Public Opinion. Maybe you’ve missed the slew of attacks Mitt Romney has endured for leading Bain Capital, a company that took over other companies. Winning the hearts and minds of other people can be tricky, and if merging with or acquiring another business will cause harm to a community or an industry, prepare to pay the price in the court of public opinion.

Financial Fallout. If you are considering a merger or acquisition, I assume you have done the math to determine how the action will affect your bottom line. Make sure you are looking closely at the bottom line of the other companies, too. Look for hidden debt that you might not know about. That’s not a surprise you will welcome once the papers are signed and the business handed over.

Shifting Workforce. Will people lose their jobs? That is the initial fear everyone has when their company is being bought or merged. It’s a rationale fear and you will need to address it, especially if yours is the acquiring company. If you don’t know the answer, be up front about that. Do not make promises you cannot keep. If some people will lose their jobs, it is better to be honest about it and to pledge support and placement help once it happens.

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