Ready For a Merger or Acquisition?

Many Fail Due to Inadequate Planning...

(Published in Secondary Marketing Executive Magazine) One of the most difficult decisions a business owner can face is whether to sell his or her company or possibly merge with another organization. There are a number of reasons why entrepreneurs would consider such a move, including industry consolidation, family issues, expansion, financial problems or competitive opportunities, to name a few.

Even if a transaction looks extremely attractive, business owners need to be aware that the merger or acquisition process can be very tricky. Selling your organization or merging with another business should be undertaken only if you are sure your company is ready for what may be a marathon.

M&As provide a wonderful opportunity for entrepreneurs in small or mid-sized businesses to reap the rewards of their efforts. However, they are complicated projects that require an overall strategy that includes effective due-diligence and long-term planning. One of the most common ways these transactions fail is due to inadequate planning. Studies estimate that the failure rate for mergers or acquisitions is as high as 70%. A recent KPMG survey even estimated that only 17% of transactions succeed in creating shareholder value.

Business owners need to realize that selling their business or merging with another company is not only a marathon for them, but for their employees as well. Everyone is going to have to learn how to adapt and work in a new culture, change their focus and adjust to new leadership and objectives.

This transition can be hard. Outside help is often needed to manage this process and many owners turn to business advisors for their expertise. A clearly defined timeline, strategy and plan are essential, and owners must be well prepared if they want to be successful.

There are a number of things you can do to prepare for a sale or merger. While conducting due diligence on your possible buyer or partner, you should review the health of your own company. This step is rarely a focus for many M&A firms or banks whose primary goal is to sell your company quickly. It is imperative to get your business running at its peak and maximize its value before you enter into this process. If it is not performing at its best, it might be undervalued and you might not get a second chance to achieve a maximum return for all your hard work. (continued)

Projects Update

The following is a quick review of some of the projects we are managing to help our clients develop long-term growth:

Transition Planning – Negotiated an ownership buyout of a distribution company, where two executives secured full operating control of the organization from the previous partners. Managed the process and currently serving as business advisors during the transition period.

Family Business Consulting - Improving communication and relationships between family members of a national distribution company, helping the family develop and implement a short and long term strategic plan for growth, as well as roles.

Strategic Growth Plan - Assessing professional services company's marketing needs and developing strategic positioning plan, as well as overall brand enhancement, sales execution and coaching.

Mage, LLC
Magi to Successful Entrepreneurs

Mage is a group of entrepreneurial business advisors who provide private and emerging companies with a broad range of business and organizational services. We are in the business of growing companies to increase their value for owners. Mage's offers the following services to drive growth:

• Executive Coaching
• Strategic Planning
• Change Management
• Organizational Design
• Corporate Financial Services
• Mergers & Acquisitions
• Boards of Advisors & Directors
• Management Development
• Technology Consulting

For more information about Mage and how we can help your business, please visit www.mageusa.com or call us at 781-449-8366.