What to Know About Common M&A Challenges


When it comes to mergers and acquisitions the hope is that all will go smoothly, it will be an efficient process,and you’ll get the price you’re hoping for. Does that always happen? Not necessarily. There are a lot of obstacles that can occur in mergers and acquisitions, but many are avoidable if you’re prepared.

The following are some of the most common reasons that M&A don’t go well whether that means inefficiency or lost deals, and some tips for dealing with those challenges and obstacles.

Not Having a Secure Document Management System

Due diligence is necessary for M&A, no matter the specifics of the deal. As part of that, it’s important to have a secure M&A due diligence solution in place before you start talking with potential buyers. When you’re sharing due diligence materials, including your financial records, it’s really the core component of M&A.

If you want to have a successful deal, these need to be easily and readily accessible, but they also have to stay secure and organized. If you don’t choose a quality document management system and virtual due diligence room that allows you specific permission control, you’re risking the deal,and you’re also putting your security in jeopardy.

The goal should always be making sure the right people are able to access the right documents at the right time.

Waiting Too Late to Bring Experts In

A lot of companies will wait until there’s already an issue before they bring in third-party experts. It’s better to be proactive and bring them in at the beginning. This can include financial professionals, technical professionals,and talent-related pros. Other professionals that need to be part of the equation from the start can include lawyers and accountants.

This can be especially important for mid-sized organizations that have a relatively lean in-house staff with limitations in their capabilities.

When these seasoned experts are brought in proactively, it can help everyone be more strategic during the M&A process and can alleviate many of the hurdles that could occur down the road.

When you hire experts to work with you, they need to be knowledgeable not just in their field but also experienced with M&A deals.

Similarly, you should be proactive with how you keep up with your documents and financials. Maybe you’re not even sure yet if you’ll be part of an M&A process, but you should still be prepared as if it could happen at any time.

Avoiding Red Flags

No potential buyer wants to see red flags when they’re going over your financials and related documents. You may know there are red flags, and you should deal with them proactively rather than waiting until they potentially sideline a pending deal.

For example, are most of your sales coming from only a few customers? If so, you need to find ways to grow and diversify your customer base before you enter into the M&A process.

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