• Accounting
        • Your financial statements should show a complete picture of your business, and lay the foundation to help you create a strategy for the future.
          READ MORE>

        • Tax
        • Tax returns prepared to ensure we minimize your liability and keep more of your earnings over the long term.
          READ MORE>

        • Business Advisory
        • From proper entity selection at the inception of a business to developing an exit strategy, we are here to guide you in making informed decisions that are goal driven and take into consideration the materiality of your financial situation.
          READ MORE>

        • QuickBooks
        • We maximize your QuickBooks investment by customizing the software to meet your specific needs and industry best practices.
          READ MORE>

        • Litigation Support
        • We employ strong analytical and communication skills to produce evidence that supports your position in cases of a dispute or negotiation.
          READ MORE>

        • M&A Advisory
        • Whether you are selling, acquiring or expanding, we are well equipped to ensure you respond to opportunities swiftly and with confidence.
          READ MORE>

        • SJG
        • Manufacturing & Distribution
        • Success in manufacturing and distribution hinges on your ability to manage numerous details with accuracy and foresight into how they impact current and future operations.
          READ MORE>

        • Consulting Services
        • You focus on your core competencies, customer service and strategy and we’ll keep you from getting caught off-guard by daily financial tasks or overwhelmed by growth.
          READ MORE>

        • Medical
        • Patient care is your primary concern. Providing the best clinical experience for your patients continues to get more difficult and costly. Delivery models are changing from fee for service to quality based.
          READ MORE>

        • Legal
        • Running a legal firm is a balancing act with high stakes. Your reputation hinges on your ability to support clients with responsiveness and accuracy.
          READ MORE>

        • Real Estate
        • Real estate is characterized by large material gains and losses. Every transaction has the potential to impact your accounting and tax situation.
          READ MORE>

        • Technology
        • Perhaps more than any other industry, technology companies must have an infrastructure built to scale. A culture of continuous iteration requires an ability to account for a fluctuating profit margin.
          READ MORE>

        • Professional Services
        • With a consultative, integrated approach to accounting, tax and consulting services for businesses and individuals, we work hand in hand with you to achieve your goals.
          READ MORE>

        • SJG
  • CAREERS
  • CONTACT

SJG Blog

How to be one of the 40% of Companies that Successfully Complete an M&A

SJ Gorowitz Atlanta Merger Support

For companies seeking to grow, shrink, adapt or change their business, or improve their competitive position, a mergers and acquisitions (M&A) strategy often is a natural and potentially viable  pursuit.

 

M&A deals are performed to combine or transfer company ownership, operating units or assets. In simplest terms, a merger combines two companies to form a new company, and an acquisition is the purchase of one company by another in which no new company is formed.[1]

These transactions happen all the time. In fact, FY 2015 saw 12,846 deals, with a cumulative value of $2,194.7B in the U.S. alone.[2] Despite the validity of this approach and the number of deals that are successfully completed, 60% of business owners who try to sell their business fail to get the deal done.[3]

 

Reasons for High M&A Abandonment Rates

While many reasons exist for the high M&A abandonment rate, decades of experience assisting expanding and emerging companies have shown us that the most common reason is a lack of preparedness. Before even considering an M&A transaction, companies should have a clearly defined strategic plan and airtight financials. And that means making sure your books are – and remain – in order.

We can’t stress enough the importance of maintaining current and historical financial data, including tax returns, balance sheets, and P&L statements. Accuracy and diligence are the only way to keep a holistic sense of your financial strength, which is imperative if you’re planning to position your company to purchase another business, be acquired by another business, or merge assets or operations with another business.

 

M&A Requirements from the Buy and Sell Side

If you’re planning to acquire a company, you likely will need to secure a commercial loan or a line of credit. That requires you to present proof of your financial condition. If you’re on the other side of the deal, you should expect that any potential buyer will want to review every aspect of your business. Gaps in your records are cause for questions that can reduce the sales price, negatively affect terms, generate excessive professional fees or, worst-case scenario, keep the sale from a successful completion.

Accurate, professionally prepared and presented financial records help increase the confidence of decision makers, which in turn helps to maximize the value of the deal. In fact, post-merger or post-acquisition financials can be even more important – from compliance to setting growth objectives, the accuracy of the books is at the heart of the long-term success of the deal.

Certainly, the size of a deal brings with it unique challenges, opportunities, and requirements. But whether a deal value is less than $10M (the majority of deals by count) or exceeds $100M, the basic imperative is the same. You must embark on an M&A strategy with fully prepared current and historical financial data.

As part of our M&A Advisory Services, we work closely with other M&A experts including business brokers, valuation experts, attorneys, commercial lenders, and investors to help our clients identify and capture opportunities at each step along the transaction process. As part of that, we put a heavy focus on the tasks and strategies specific to M&A transactions, including:

  • Buy Side Due Diligence Procedures-Seek to verify reported income, expenses and EBIDTA
  • Pre- and post-transaction advisory services
  • Deal Structuring
  • Identify and fill in any record-keeping gaps
  • Income tax planning and entity structuring
  • Post-acquisition financial and tax support services

For the 40% of companies that successfully complete an M&A transaction, chances are there is a solid financial advisor helping to keep every detail in place. Our team at SJG has the resources and experience to keep you informed, stable and equipped to meet growth opportunities, whether you are integrating, selling or acquiring a business.

We’re here to help.


 

[1]Mergers And Acquisitions (M&A) Definition, Investopedia

[2] US MergerMetrics, FactSet, April 2016

[3] Inc.com


 

Sidebar Newsletter Signup Form

  • We will never spam you or sell your email address.

Share This:

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Subscribe to Our Newsletter

Recent Posts

Scroll to Top