Why buy this company and why buy it now?

Business Acquisitions & Mergers in Northern Ireland

There are many clear advantages and obvious opportunities in merging with or acquiring another business. It could be that you see potential in expanding in another sector- and a merger could offer the quickest route to target that market. Or perhaps the timing is just right to try to offer a competitor an attractive, unrefusable offer to join forces.

Successful businesses often look to a merger or acquisition as a way to achieve their ambitions. Different legal issues can arise at different stages of the acquisition process and require separate and sequential treatment.

Partner Max Nesbitt guides on the different stages, challenges and advice for success- answering our clients most frequently asked questions.

What should you look out for when acquiring a company? 

When we receive a new instruction we always ask the question “why”. There is never one answer but a collection of attributes which when brought together build a business case. An acquisition or merger will always be weighted on success financial modelling but considerations will always be given to a staff and cultural fit which are very important in modern businesses and can have a significant impact on the success of an acquisition or merger. 

Does it fit in with your current (growth) strategy?
To what level can the business be grown? 

All businesses should have a business plan with short, medium and long-term goals but an opportunity does sometimes come out of the blue. When reviewing the opportunity with your professional team it is important to review your business plan, look back at the progress so far and see what impact an acquisition or merger will have on your goals and your key stakeholders and whether the opportunity aligns with your overall business objectives. 

Which type of challenge is the hardest to overcome in a merger/acquisition?

There is no one size fits all approach, each merger/acquisition will have its own set of facts and circumstances. Difficult challenges that need to be addressed can relate to issues like control, management and direction post completion all the way to regulatory consents and approvals. 

How do you secure the trust of important stakeholders before and throughout the acquisition / merger process?

Communication is key. In most acquisitions/mergers the important stakeholders at this stage are the owners/shareholders and funders. Properly preparing your business plan, modelling outcomes and costs will be needed to secure the backing to proceed. 

While most acquisitions/mergers are highly confidential following completion it is also critical to ensure that you have an appropriate communication strategy in place for employees and customers to promote the collective benefits of the merger/acquisition. 

What makes a merger unsuccessful?

There can be a multitude of factors that determine whether a merger is successful or unsuccessful or different levels of success. It will however take a number of years to work through the migration of staff, systems and workflows to be able to determine whether the perceived outcomes from the merger have been successful. 

How can a client / company carry out due diligence- and what would be your advice to them?

The key is making sure you have the right senior and professional team around you who is experienced and able to properly advise. Many people have long standing solicitors or accountants who they are comfortable using but sometimes they may not be geared up for these types of transactions and making a decision to bring another experienced professional advisor on board will make a significant difference to the efficiency of the process and reduce potential risks or liabilities. 

What needs to happen to complete the deal?

Usually the parties will enter into a legal contract which details the arrangements and any conditions which need to be satisfied before the deal can complete. While it sounds simple in reality these are long complex agreements and therefore fully understanding your position and requirements is keys to a smooth completion. 

What post completion changes need to be considered when approaching a merger or acquisition?

There is a huge amount of work that needs to go into harmonising the business post completion, these are just a few common areas that need to be considered; 

• Harmonisation of staff; bringing staff together, reviewing and considering their pay and benefits and how to deal with duplication staff typically in support functions like accounts, human resources, marketing and IT whereby redeployment or redundancy may need to be considered. 
• Harmonisation of systems; how do you deal with legacy systems, update existing software/hardware to ensure that processes and infrastructure can be centralised. 
• Branding; what will the new business look like. 
• Assets; reviewing your assets list, what does the new business need, how best to dispose of property, plant, vehicles or no-core business. 
• Investment; what needs to be done to get the best out of the deal and how to capitalise on your investment and drive growth.

What would your advice be to companies considering this type of expansion and growth?

Be open minded to opportunities that may arise but critically assess the outcomes, make sure it fits within your business plan and engage your professional team early as they will be able to guide you through the process. 

Get in touch

Max and our Corporate team act and advise a broad portfolio of Business owners across Northern Ireland, offering them joined-up, holistic legal advice on strategic and practical issues affecting all stages of their businesses lifecycles- from SME start-ups to Expansions, Mergers and Acquisitions.

If you require advice get in touch; 02890323864 or make an email enquiry.