Undergoing an acquisition is one of the most difficult times for any company and its employees. Whether an outright change of ownership or some form of merger, it can be a challenge to keep everyday things ticking over during these unsettled periods. However, it's perhaps more important than ever that finance professionals are able to adopt a 'business as usual' attitude when any form of Merger & Acquisition (M&A) is on the horizon.
As with any significant change an organization goes through, being prepared is the most effective way of ensuring the least amount of damage is felt either by the business or the professionals working for it.
But how can you prepare your company for something as big as an acquisition?
Call on specialists
You may have vast experience as a team but unless there is someone with dedicated M&A knowledge, it's a wise idea to get some form of specialist advice. The financials are likely to be a considerable part of the acquisition so it's important that everything is in order and on hand to avoid any unnecessary delays that could be costly for the business.
Whether you need legal financial advice or just information about the acquisition process, you should call on this support as soon as possible to ensure you have time to get everything in place ahead of schedule
Merging a company with another or having it completely bought out can prompt a number of financial risks. From employees leaving to clients not paying their invoices, it's important to identify these risks and the potential value it poses to the company as a whole and the M&A process.
Once you have these outlined you can work with company directors to put measures in place to try and minimize the risk and impact it could have on the wider organization.
Understand any pending contracts
If you have any contracts that aren't stable - for example, if payments are not due until after your company has been acquired or if new clients have not yet signed a contract - you need to identify and understand these. Not only is this something that the buyer is likely to want to know but it will also help you estimate the potential risk caused by the change.
You should also be prepared to inform clients of the change before everything is actually official. There's likely to be a significant period of time between agreeing the merger/acquisition and the day it comes into effect. Clients of both firms should be told before the latter, allowing you to reassure any concerns either may have.
Work on a Disclosure Schedule
As soon as possible, you'll want to have a set timeline for when certain aspects of the company will be shared with the buyer. From key contracts, to intellectual property and litigation, there are a number of different elements that will need to be disclosed to the business buying or merging with yours. This can be a lengthy process as you'll often need the advisement of a variety of other people in the business, as well as calculating the financial worth of all the different elements.
Once a Disclosure Schedule is solidified, it's important that you leave plenty of time for the buyer to agree to the timeline as there can often be back-and-forth about the order in which certain items are shared.
Maintain day-to-day normality
It's important that you prioritize everyday financial tasks during the acquisition period. Things that may seem small in the grand scheme of things, like paying employees on time, can have a massive impact on retention and morale during this difficult time. You also need to ensure that expenses and budgets are maintained. This not only helps to keep stability for employees but also ensures your company is adhering to any obligations it has as part of the M&A process.
Doing this prevents the business's performance from deteriorating between the time when the deal is agreed and the date of completion.