A merger or acquisition is one of the greatest upheavals a business can go through, but the long list of potential benefits that accompany them is clearly enough to outweigh the disruption. In the first half of 2022, the business world saw the number of mergers and acquisitions taking place increase significantly, and finally reach the same levels we saw before the Covid-19 pandemic.
2021 represented an incredibly difficult year for mergers and acquisitions. Even as the Bank of England’s chief economist reassured business owners across the country that the economy was on the brink of ‘bouncing back’ to what it had been two years previously, the market conditions we experienced last year were incredibly hostile. As such, many potential M&As were postponed, or turned down indefinitely.
Now, however, with the market much more inviting for start-ups looking to break ground in new and, at this moment, underutilised spaces, the statistics are changing drastically – and in a matter of just months.
Here’s what you need to know.
How Will the Current Economic Challenges Impact this New Trend?
It’s clear that start-ups, SMEs, and largescale corporations alike will be approaching the second half of 2022 with a cautious step. The economic uncertainty we face as businesses and individuals is a constant concern and devising our own strategies for navigating it will be a key priority moving forward.
Even so, the forecast looks far more positive than negative. The key to navigating economic challenges like this one is often in proactivity, in realising the financial benefits of restructuring the business, and, potentially, in exploring the prospective benefits of M&As.
History shows us that M&As and other major deals struck within periods of economic shrinkage can be just as, if not more, successful than deals struck just before, or just after. Achieving significant growth is harder, and taking the right risks can be the jumpstart businesses need to thrive in spite of the challenges.
What you Need to Consider
However strong the potential offered by the M&A is, it is vital that you keep your feet (and the business’) planted firmly on the ground. Navigating this unfamiliar area of business is not easy, and you need to make sure you have the right expertise on your side first.
To pass through the potential buyer’s due diligence, you’ll want to make sure your figures are exactly as they should be, so an accountant will prove more vital to the business than ever before. For everything else, being able to lean on the practical knowledge and experience of corporate solicitors will prove essential. You’ll need to decide how to structure your deal – and, for that, understand the different tax implications of those structures.
Add to that the fact that creating a non-disclosure and head-of-terms should be a top priority – as well as focusing on retaining key talent and doing due diligence of your own, all too a strict timescale – and it’s clear that attempting to go at it alone is, put simply, out of the question.