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M&A Framework at F Silveira
M&A is now an integral part of the growth strategies of many companies. Due to fundamental shifts in technology, deregulation, and globalization, many industries are undergoing transformation, and businesses can be involved in merger and acquisition transactions as buyers, sellers, or both.
Our M&A framework at F Silveira CPA has three phases:
- M&A strategy development
- Transaction development
- Post-closing activities
The above are the steps that are common to most M&A transactions. However, the steps will vary depending on the kind of transaction. Contact our advisors to get started.
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M&A Strategy Development
The strategy development process and the role of M&A have critical overlaps. In fact, an organization’s overall strategy frequently includes M&A as a key component. Having no M&A strategy is only acceptable if the company has no plans to pursue acquisitions and does not anticipate being targeted by others for acquisition, which is doubtful given the state of most sectors today.
F Silveira CPA can help your business to be clear about its strategic rationale for making an acquisition. The next step is to compare and choose potential acquisition targets or merger partners after an organization has defined its M&A strategy and established its purchase rationale and criteria. Contact us today to develop your M&A strategy.
M&A Transaction Development
This phase takes a four-step approach to M&A transactions, commencing with approaching the target and ending with the board’s approval of the signing of a purchase and sale agreement. Each step includes several activities, depending on the size and complexity of the transaction. These steps include:
- Due diligence
- valuation and structure
At F Silveira CPA, we understand why It is important to choose advisors who have relevant industry experience and are free to act on the buyer’s behalf.
Preliminary due diligence uses the minimal target company information disclosed under a confidentiality agreement to confirm the purchase rationale, preliminary valuation, and ability to produce value. Additionally, it enables the buyer to begin evaluating the business combination. Final due diligence, on the other hand, is a thorough examination and assessment of every relevant part of the business, including its organizational, legal, and other relevant areas, strategy, finances, and operations.
Our F Silveira advisors will also provide support for the valuing and transaction finalization process. A crucial phase in completing the transaction is negotiating the final acquisition price and important clauses of the buy and sale agreement, selecting executive hires, and obtaining shareholders and, in some situations, regulatory clearances. Speak to an F Silveira advisor today about your M&A needs today to get started.
M&A Post-Closing Activities
The majority of business owners are aware of how crucial post-closing activities are to the success of acquisitions, but they may not have the resources necessary to do so. This is why working with a trustworthy CPA advisor is essential. Post-closing activities consist of three phases: planning, implementation, and reflection.
An effective oversight implementation plan, complete with assigned responsibilities, metrics, and milestones, is key to a successful M&A transaction.
Actually, only half of the job is done by the M&A transaction itself. No new value can be produced until the post-closing execution starts, even if the market may immediately recognize part of the potential value created by uniting the two firms.
The framework’s last stage examines the lessons that businesses can take away from analyzing their M&A successes and issues. It emphasizes some of the essential skills and abilities required to compete in M&A. This highlights how companies may be confident that they are improving their skills and capacities for the upcoming transaction by learning from each transaction.
F Silveira Sources of Value in M&A
In M&A, there are typically four main sources of value. Each ought to boost competitiveness and increase shareholder value. All four sources of value are frequently combined in transactions, but it is still helpful to look at them individually because they each provide unique difficulties and hazards as well as varied success criteria.
The benefits of increased scale in operations and administrative functions
This includes revenue synergies such as access to new markets, new products, or new channels for existing products
Refers to better positioning or better platform for future growth
Other sources of value from the change of ownership
Many private equity firms try to create value by changing the financial structure of a business or the way it is managed.