3 M&A Myths You Need to Stop Believing

Mergers and Acquisitions are a great way to grow your business. Here are 3 myths that you should stop believing as you pursue the right deal for your company. 

Myth #1: A deal takes three to six months 

Many think that an M&A deal can be easily completed within three to six months. This may be the case for some “for-sale” acquisitions. However, the truth is that it usually takes 12 -18 months to complete an acquisition, especially in the case of a strategic. not-for-sale acquisition. There are many steps in the acquisition process including initial development of your acquisition strategy, market research, identifying acquisition prospects, contacting and meeting with owners, conducting due diligence, and finally integrating the two entities. It is important not to rush through any of the steps and risk acquiring the wrong company.  

Myth #2:  You can execute an acquisition without a dedicated team 

For an acquisition to be successful, it is important to commit resources like time, people and finances. An acquisition is not something that can be simply done on the side. Without rearranging priorities, an acquisition search will not produce positive results. While there are many aspects of the acquisition process you can do internally, sometimes it may be best to hire an M&A advisor. Experienced advisors will accelerate the M&A process and can undertake certain aspects of the process more efficiently. When you decide to pursue a strategic acquisition, devote the right amount of attention and resources to the process. 

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Myth #3: Only the CEO & CFO should be involved 

Acquisitions are confidential and that is the reason most company owners do not disclose their acquisition plans to the entire staff. However, it is not a good idea to limit the internal M& A team to just the CEO & CFO. The best approach is to bring in leaders from across functional areas of the business. This will bring in a different perspective essential for developing an acquisition strategy and reviewing potential companies to acquire. In addition, including the functional leaders will make for a smoother due diligence because you will have the buy-in of the management team in developing and implementing an integration plan.