M&A is a viable method for companies to expand their geographical reach, gain an edge over competitors and gain access technology employees, assets or even employees. However, M&A is also a time-consuming and demanding process. The process can take months of evaluating potential target companies with formal due diligence, which involves an exhaustive study of company information, including financial, commercial and operational. It can be more difficult to succeed when an organization is located far away and the same steps must be followed, but with additional challenges in collaboration and communication.

Preparing for Day One

When a company gets acquired, the first day of operations (known in M&A terminology as “Day 1”) should be planned. That includes setting up organizational structures, integrating IT systems and other back-office www.choosedataroom.net/why-data-room-is-a-perfect-deal-management-instrument infrastructure and educating staff members regarding how things will be conducted in the future. The M&A team must also ensure that all crucial documents are available, including legal contracts, agreements and financial models.

Building a Vision that is shared

A successful M&A strategy requires a clear understanding of the similarities and differences between the two parties – both in terms of culture and business goals. This is particularly crucial when companies are buying and merging remotely. An organization that isn’t equipped with an understanding of its goals can lose its direction and create friction at work.

M&A can be a high-stakes activity that often has unintended consequences. The sunk-cost fable, particularly can cause M&A decision makers into agreement traps where they agree to an arrangement that is less than the best alternative.