{"id":15455,"date":"2022-03-09T20:03:27","date_gmt":"2022-03-09T20:03:27","guid":{"rendered":"https:\/\/www.markperlbergcpa.com\/perlbergs-tips-for-successful-mergers-and-acquisitions\/"},"modified":"2022-03-09T20:03:27","modified_gmt":"2022-03-09T20:03:27","slug":"perlbergs-tips-for-successful-mergers-and-acquisitions","status":"publish","type":"post","link":"https:\/\/prosperlcpa.com\/blog\/2022\/03\/perlbergs-tips-for-successful-mergers-and-acquisitions\/","title":{"rendered":"Perlberg\u2019s Tips for Successful Mergers and Acquisitions"},"content":{"rendered":"
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With the events of the past week and whispers of world war, it\u2019s pretty easy to get caught up in the non-stop fear cycle. Watching a full-scale invasion of Ukraine, anxiously waiting to see if China will invade Taiwan, hearing Turkey issue threats to Russia if they invade the Black Sea\u2026 well, it\u2019s more than enough to get everyone on edge. <\/p>\n

So, if I can be so bold here, I want to encourage you at all costs to keep your mind clear of all of this.<\/strong> Of course, you can stay informed — but make sure you take a break from the anxiety-inducing news coverage and get off the triggering social media scroll. <\/p>\n

Instead, focus your energy on your Atlanta business and what YOU can do to lead well at this moment. With all the doomsday voices out there, take this opportunity to be a voice of hope and reason. <\/p>\n

Now, because we’re so very busy over here at Mark Perlberg CPA PLLC, we\u2019ve been able to stay out of the fray (mostly). <\/p>\n

Also, we\u2019d love it if you could carve out a little time to leave us a review on Google.<\/strong>
Make us smile with a review on Google<\/a><\/strong><\/p>\n

Reviews really help our business visibility and help others like you see what we can do for them. Thank you in advance for taking some time to do this.<\/p>\n

So, today, I thought I might assist in the task of getting our minds away from war … so, let’s talk about mergers and acquisitions, shall we?<\/p>\n

Perlberg\u2019s Tips for Successful Mergers and Acquisitions<\/strong><\/span>
\u201cOne of life’s most painful moments comes when we must admit that we didn’t do our homework.\u201d – Merlin Olsen<\/i><\/span><\/p>\n

Big mergers and acquisitions (M&As) are back in the headlines. Frontier and Spirit airlines plan to get hitched, for instance, and exercise equipment giant Peloton was supposed to be for sale but probably isn\u2019t \u2013 for now\u2026<\/span><\/p>\n

And we all know mergers that famously fizzled in the past: eBay and Skype, AOL and Time Warner, Daimler and Chrysler. Fingers galore pointed afterward but behind the scenes in all these mega-busts was, most likely, somebody just not doing their homework.<\/span><\/p>\n

Sooner or later your small Atlanta business thinks about buying somebody else (or being bought). How far that idea goes often depends on what one company finds out about the other. Due diligence is finding out all you can about something you want to buy, the same way you\u2019d research a car or a refrigerator before you put down your money. <\/span><\/p>\n

There\u2019s a lot<\/i> to look at with mergers and acquisitions \u2013 and a lot of questions to ask. <\/strong><\/span><\/p>\n

Checking the boxes<\/strong><\/span><\/p>\n

It\u2019s only common sense that the time to find a trouble spot is before anyone (especially you) puts pen to paper. Proper due diligence into another company means you dig into issues from profits and assets to tax risks and legal troubles. It puts facts and figures to all those claims that one side or the other might have claimed during all the merry dealmaking; it can turn up details that poke holes in some of those claims, too. <\/span><\/p>\n

A piece of paper you should be most concerned about as early as possible in the deal is your due diligence checklist <\/i>covering <\/i>three areas: financials, legal, and operations. <\/span><\/p>\n

(This is only a starter list \u2013 the needed documents can vary case to case and company by company \u2026 check with us if you have any questions).<\/span><\/p>\n

Financials:<\/i> The company\u2019s balance sheets; A\/P and A\/R; income and cash flow statements; last three years\u2019 tax returns; credit reports; product value reports; data on gross profit margins; fixed and variable expenses; audit and revenue reports; lists of physical assets; and debt information.<\/span><\/p>\n

You also need a list of past performance projections \u2013 and actual results \u2013 and assumptions that were used to make those projections, as well as a history of pricing. If the company has them, a list of current investors and shareholders. <\/span><\/p>\n

Legal:<\/i> All contracts, including leases; P\/Os; purchase and distribution agreements; sales contracts; employee and contractor agreements; trademarks, copyrights, and patents; articles of incorporation; and business registration documents. <\/span><\/p>\n

In operations, you\u2019ll do more interpreting of data that the seller provides. Take customers, for instance: Look at the numbers of repeat customers, the peak buying times, and the most popular products. What are the customers\u2019 demographics and what have they said about the business? How has the business been marketed, and how\u2019s the marketing ROI?<\/span><\/p>\n

Get a list of all of the company\u2019s products and their development history, costs to create, selling price, planned enhancements, profit margins, and growth rates. <\/strong><\/i><\/span><\/p>\n

What about the people in this company? Investigate that, too, starting with an organizational chart and list of current employees, including their positions, earnings, skills, and qualifications. How do the wages stack up against industry standards? What are the benefits plans and perks? A huge factor in this labor market: What are the projected staffing needs? <\/span><\/p>\n

Outside of the company, who are the competitors (maybe you were one yourself\u2026)? Who are the lenders and suppliers \u2013 find them and ask them what they thought of the business. If you\u2019re new to the industry of the business, research it. Is it growing? <\/span><\/p>\n

Has this company been acquired before? Why is the owner selling, anyway? (You probably already asked this of the owner themselves \u2013 do others back up that answer?) <\/span><\/p>\n

Good rule: Think about the questions that might make you<\/i> uncomfortable if someone asked them about your company.<\/span><\/p>\n

Accept no substitutes<\/strong><\/span><\/p>\n

All through the mergers and acquisitions process you\u2019ll want written guarantees of confidentiality. No one (least of all you) wants to bear responsibility for a company\u2019s trade secrets or internal information discovered through due diligence. <\/span><\/p>\n

There\u2019s no such thing in due diligence as a stupid question \u2013 and definitely no substitute for doing your homework with mergers and acquisitions.<\/span> <\/strong><\/p>\n

When it comes to being a trusted Atlanta advisor, we\u2019d be happy to give you feedback and help you examine the details of merging with or acquiring a new business \u2013 a second set of eyes, so to speak. Reach out if you want some help:
calendly.com\/mark-perlberg-cpa<\/a><\/strong><\/span><\/p>\n

And again, if you can spare some time, would you leave us a review: <\/span>Make us smile with a review on Google<\/a><\/strong>? <\/span>Thanks in advance.<\/p>\n

Here\u2019s to staying out of the frantic fear swirl and staying focused on your Atlanta business.<\/p>\n

We\u2019re here for you,<\/p>\n

Mark Perlberg<\/strong>
<\/strong>
Mark Perlberg CPA PLLC<\/strong><\/p>\n

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