Managing A Smooth Business Merger

Knowledge shared is knowledge gained. There’s certainly merit in this saying when it is applied to businesses, and often your firm might not know how much it could benefit from external input until you have tried it. United Carlton, suppliers of print management software have recently undergone a merger, being acquired by the likeminded business equipment supplier, DMC Canotec. By joining forces, the two businesses have accrued a larger platform breadth, and the move has enabled both business to grow a presence in new areas.

 Many businesses might find the idea of a merger or acquisition daunting, but the process itself is certainly worthwhile if you are keen on solidifying your professional prowess. Take a look at this guide on what to expect, and learn why you should make your next business move a merger.

Mergers and acquisitions: the basics

The core aim of a merger is to increase business value, by joining operations with another firm. Stock agreements will vary depending on the terms of the merger, but they tend to work by one company buying the others common stock from the shareholders. These agreements are known as stock for stock, and they’re the most common approach for striking up a merger deal.

The difference in terminology can be confusing as many people use acquisition and merger interchangeably, but they do have some inherent differences. The most clear-cut classification is simply that if the corporate leadership of the company has not changed a lot, then this is understood as an acquisition. A merger on the other hand will typically involve some internal restructuring, where the company realigns itself with the new joint venture vision. At United Carlton, the first priority was to lay down the focus that the merger was set out to achieve, this being to build nationwide coverage and pursue new avenues for success and business opportunities.

The benefits of mergers and acquisitions

The benefits of a merger or acquisition might appeal to your business if you’re looking to grow, and you should certainly consider teaming up with a likeminded firm if you want to expand your company reach. One of the most obvious benefits is the sharing and gaining of new knowledge, both within and beyond your current sector. With a merger or acquisition, you’ll expand your team whether you’re working in close collaboration or as separate businesses — there’ll still be a lot of joint work as you lay down the plan moving forwards. Most likely, there’ll be an opportunity for you to gain some new valuable assets, and these could bring some financial benefits. Also, internal expansion isn’t realistic for every firm, so opting for the merger route can allow you to pursue expansion by acquiring another business at a cost which you can accommodate. Mergers and acquisitions have also proven themselves as being cost effective, considering that they entail the potential for shared marketing budgets and increased purchasing power. United Carlton maintained a constant emphasis on growing their business intelligence, and this looks set to happen on a wider scale as the merger will provide a greater level of exposure.

Overall, diversification will naturally grow when you choose to merge with another company, as your platform is instantly doubled. Most of the time, businesses which are joined through acquisition will specialise in the same or a similar niche, and so a merger deal can enhance your service with complementary assets from the business that you’ve joined forces with. United Carlton are

The challenges of a business merger or acquisition

By entering into a merger or acquisition, your business will most likely be navigating unchartered territories, and you’re likely to encounter some challenging situations from time to time. Your business will have to adapt the way it communicates with both the business you’re joining, and your current staff members. Company synergies are known to fail where this level of communication hasn’t been established, and one of the biggest complaints relates to the understanding (or lack of) that members of staff have towards the situation.  By providing constant clarity on proceedings as they happen, you can avoid any sense of detachment amongst your employees, enabling them to join you on the journey forwards. Answering all questions from members of staff is key and maintaining approachability and transparency throughout the process is key to overcoming these issues. Related to this is the difficulties that may arise surrounding employee retention rates, as employees might feel threatened by the new arrangement. This doesn’t have to seal the fate of your merger at any point, and United Carlton established this from the offset with their recent acquisition. The company provided reassurance for employees that their roles were safe and that there wouldn’t be any real changes to the day-to-day proceedings. Stress and anxiety are both responses to anticipate, and in order to secure your business’ retention rates you should aim to ensure that your employees voice any concerns during the process.

If you’re looking to develop and solidify your business presence, then a merger or acquisition has the potential to deliver some impressive results.

error: Content is protected !!
Exit mobile version