One of the most important factors in getting value from mergers and acquisitions in California is integrating the companies to keep trading with existing partners smooth and to promote organizational efficiencies. The mergers and acquisitions process can be roughly broken down into four steps. They are conducting due diligence, coming to agreement, integrating the companies and attaining value.
The due diligence step involves an examination of the business that is to be acquired or the businesses to be merged. In a deal that is well-run, due diligence will include assessment of every facet of the operation, including accounting, finance, human resources, research and development, intellectual property and technology. The point of this step is to ensure that the buyer knows what it is buying so that the parties can move toward agreement.
The agreement step involves negotiating and drafting the terms and conditions of the deal. Typically, this step involves detailed planning that covers strategies and processes for assessing and valuing inventory, making changes to management, structuring the new organization and establishing communications.
The integration step is when the companies actually go through the process of combining. This involves implementing planned management changes, selecting and rejecting vendors, assessing improvements and investing in resources.
The value attainment step is where investors, shareholders and stakeholders reap the benefit of the deal. Mergers and acquisitions activity creates value by transforming the organizations involved. It can take advantage of existing customer bases and markets in new ways or grant new economies of scale to the operations. An attorney with experience handling mergers and acquisitions might be able to help by examining books and physical facilities during due diligence or by negotiating the terms of the transaction during the agreement step. An attorney might also assist with the negotiation and drafting of the necessary agreements or develop a strategy for the smooth integration of the companies.