If you have purchased one of the companies, you might want to combine them.Two business owners believe that their merged company will be stronger than their own.You will need to hire professionals who can help you through the process of merging two businesses.
Step 1: Ask about active status reports.
If you are confident that the business is healthy, you should never combine it with another business.For the past three years, you should ask for active status reports.
Step 2: There are other financial documents to be obtained.
You can judge the health of the company by getting relevant financial documents from the other business owner.Balance sheets tax returns accounts receivable schedules accounts payable schedules inventory listing list of physical assets and real estate owned by the company are things to ask for.
Step 3: You can ask for a list of employees.
You should ask for a list of employees and a description of their benefits.If you want to keep the employees after the merger, you will need to know how much they are paid and what their benefits are.It is possible to cut people's salaries and benefits to keep them in line with what you offer your own employees.You should expect employees to leave in that situation.
Step 4: Ask about the lawsuits.
Assets and liabilities can be merged with a company.Liabilities can include lawsuits.You should know what lawsuits the company has pending before merging.If you don't think the company is willing to give you the information, you can find it yourself.You could use the internet to find the company's name.The dockets of state courts may be accessible online.
Step 5: An accountant can help analyze the data.
You might not know how to make sense of the financial information the other company gives you.You may need to hire an accountant to help you understand if merging with another business is a good deal.You can find a certified public accountant by contacting your state's Society of Certified Public Accountants and asking for a referral.
Step 6: Understand the role of a middleman.
The business broker is a person who can represent either the buyer or the seller.Value the business that the seller wants to buy is one of the critical tasks that they perform.You can help arrange meetings between buyers and sellers.Offer to purchase a business.After an offer has been made, negotiate.Help the buyer get financing.The closing of the merger should be scheduled.
Step 7: Get referrals for people you know.
You probably don't know anything about them.You need to get a referral.Referred to by accountants lawyers other businesses that have merged other people in the business community
Step 8: Put together a list of questions.
You will want to know what services the firm provides as well as the experience of the intermediary.A list of questions to ask before your consultation will give you helpful information.What size companies were they?Are they licensed?Which states?Can the middleman give you a list of references?How many people will work on the merger?Do you have to sign confidentiality agreements?What will the terms be?
Step 9: You need to meet for your consultation.
During the consultation, you will give the intermediary a general sense of the merger and also ask them questions.How well he or she listens to you is one of the most important considerations for hiring a middleman.Is the middleman interested in your situation?Did the middleman ask appropriate questions to understand the type of deal you wanted?Did you think that the middleman would be effective in keeping client confidences?
Step 10: Hire the middleman.
If you agree to their fee, then you should hire them.If you have to sign anything, ask what documents they need.If you didn't like the person you met, you can schedule consultations with other people.
Step 11: You can get referrals to an attorney.
You will want an attorney with experience in M&A.M&A deals should be handled by the person.Ask other businesses that have merged if they would recommend your lawyer.Have you used a lawyer before?He or she could recommend another lawyer who does mergers.You can get a referral from your local bar association.
Step 12: There is a consultation with the attorney.
You can schedule a consultation if you have an attorney's name.You can ask questions and describe the merger at the consultation.The extent of the lawyer's experience with mergers should be asked.How many have the lawyer performed?What types of mergers are there?How big was the company?How much does the lawyer charge?You can ask about alternate billing arrangements, such as a flat fee, if the lawyer will quote an hourly rate.
Step 13: The attorney should draft the agreement.
There will be a lot of legal tasks for your lawyer to handle.The merger agreement will be the most important.The name of the company that merged will be included in a merger agreement.How the merger will be accomplished.Assets will be passed on to the new company.There are a number of conditions which must be met in order to close the merger.
Step 14: It's time to close the deal.
The closing of the deal should be handled by your lawyer.The shareholders of each company have to vote to approve the merger.The government may need to sign off on the merger because it isn't anti-competitive.New stock must be issued for the merged company when old stock is turned in.If necessary, your lawyer will draft new documents for you.
Step 15: New leaders must be appointed quickly.
Each company had a President, a Vice President and someone in charge of marketing.You should decide who will fill the role in the new company if you only need one of each.You will lose your best employees if you drag your feet.Immediately after the merger takes place, you should fill key positions.
Step 16: An integration team is needed.
It may be difficult to combine businesses.Each company may have used different suppliers, paid different employees on different schedules, or both.The integration of the two businesses will be overseen by a team of people.A lead person will have authority to set deadlines and determine priorities.The person needs to focus on the integration efforts.There is no point in creating a team if the businesses are small.Work through a list of issues you need to address.
Step 17: It is necessary to commit to a single corporate culture.
Each company has its own culture.The cultures of two companies may be in conflict.The acquiring company assumes its culture will remain the same if it acquires another business.Survey both companies to better understand their cultures in order to develop a common culture.One company might have had a top-down decision-making style while the other business thrived on consensus.Identifying any differences early will allow you to address them.You should keep key people who are committed to the culture.The culture you are trying to create has a role model.If your culture involves little face-to-face contact, you could model what issues should be discussed personally and what can be handled by email.Explain what your decision-making style is.Explain why you find your decision-making style effective when you don't mandate changes.