Cover Your Bases
Once you have a good sense of whether a merger or acquisition is appropriate to your long-term needs, there are a number of next steps that you should take before making any sort of deal.
The next action you should take is to conduct due diligence. You want to get as much information as possible on any company that you are considering buying or merging with so that you can make the best decision possible. Ideally, you should be able to answer every question you have about a potential transaction. One fact that is important to remember is that in the same way that you have a business objective behind this transaction, so too does the other company – and that is what you need to discover. So make sure that you know what, if any, problems the other company has that could be triggering the transaction. To the extent there is a problem, see if it can be resolved or risks mitigated prior to entering into the transaction. And you may even be in a position to fix them, making you a top pick as an acquirer.
Mergers and acquisitions are time consuming and require the dedicated energy to ensure effective integration into your existing business holdings. While it may be tempting to go on a “spending spree”, it is a lot harder to obtain the full value of your transaction if you are spending all of your time with integration issues, staffing and other resource considerations while also trying to run your existing business(es).
Prior to commencing your due diligence, it is important to enter into a non-disclosure agreement. This sets the expectations for confidentiality of the terms of the transaction and privacy about the company’s operations. Your intellectual property is extremely important and needs to be protected. Naturally, a lot of information needs to be disclosed by all parties involved in order to complete a merger or acquisition transaction. A Non-Disclosure Agreement will give you the power to invoke legal action if anybody involved in the merger or acquisition spreads your private information in a way that hurts your business interests or reputation.
Before making any decision that can have such a huge impact on your professional and financial future, it is essential that you explore the proposed merger or acquisition. That is why it is important to have experienced legal counsel who can ensure that you don’t enter into deal that is not right for your business interests. The professionals of Jacko Law Group, PC are ready and able to use their business experience and legal acumen to help you make the best deal possible. We will help you gather all of the information and set the expectations you need to make a good decision. For more information, contact us at 619.298.2880.