On the Wrong End: Planning for Mergers & Acquisitions Pays Dividends

On the Wrong End:
Planning for Mergers & Acquisitions Pays Dividends

by Neil Aronson
O’Connor, Broude & Aronson

The wave of mergers, acquisitions, and strategic partnerships sweeping the software industry today reflect the broad range of situations in which a company may be sold after achieving technical and financial success, or auctioned prior to or after bankruptcy.Buyers and sellers in this never-ending cycle need to know how best to position their companies to maximize the potential from such sales.To accomplish these goals, a company desiring to be sold needs to strategize well in advance to ensure that it will be highly attractive to a corporate suitor.Similarly, a cautious suitor needs to verify with care that the business it is acquiring will deliver all that is promised with no unpleasant surprises.

A number of issues can jump out in the acquisition process and stop a deal dead in its tracks.Sometimes, a relatively minor problem can overwhelm the process, creating fear and distrust among the parties, or causing a significant (and sometimes disproportionate) change to the economics of a deal.In particular, larger risk-averse corporations may delay or cancel a planned acquisition.What causes potential buyers and sellers to tangle?And when and how should you address these issues?There isn’t one simple solution.Each company is unique and requires a comprehensive and thorough approach to preparing itself for an acquisition.The following are just a few areas on which buyers and seller should focus. More…