In the financial press, articles about mergers and acquisitions in SMEs and large corporations are published every day. While increasing revenue and getting exposure to new customers are frequently the primary motives however, it is crucial that any company looking to enter the M&A game has a well-thought out strategy to ensure the that the deal is successful.

A successful M&A involves a complex process and the final outcome is dependent upon many factors that need to be considered by both parties. It is crucial to have a top-quality management team in place to ensure that your company can successfully navigate through the M&A process and gain value. External accountants and consultants can help you establish credibility for your M&A strategy when you solicit their help.

The first step is to conduct an in-depth review of the financial health of your company. This involves looking at the profit and loss statements as well as cash flow, analyzing the equity and debt of the company, and determining if you have enough cash to pursue a M&A transaction. The financial health check will reveal any differences in your Management Accounts and Statutory Filed Accounts that could cause confusion for potential buyers.

The cost of integrating both companies is another important aspect. It could be physical expenses like merging offices, systems and employees or human capital costs, such as calculating the cost of compensation and benefits programs. Getting human capital experts involved early in the process will help you evaluate the costs involved and incorporate them into your price negotiations for purchases.