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Mergers and acquisitions are one of the most significant corporate changes companies can make. The potential risks and transformative consequences of a successful deal can keep executives awake. Expert guidance is required to bring companies together via mergers and divestitures or to separate them through spin off.
M&A services include screening due diligence, advising on price valuations to be sure you don’t overpay, and much more. The leading management consulting and advisory firms have teams dedicated helping clients to identify the right opportunities, and to develop the acquisition strategy to meet their goals.
There are a variety of types of M&A deals that range from strategic to opportunities. A “targeted acquisition” is usually executed by a well-established, large business with corporate development (corp dev) team that is searching for small, promising companies to help their growth strategies. This type of M&A is more common for tech start-ups that are difficult to expand.
Horizontal M&A involves companies that operate in the same sector and can benefit from synergies. Examples include the merger of PayPal and eBay that saw both companies joined their customer networks, and reduced operational costs. Vertical M&A occurs when a company acquires another company that offers products or services that are complementary. The aim is to increase market share and expand revenue streams by the combination data room M&A of strengths.
A true merger unites two distinct companies into an entity that is legally distinct, resulting in one business with the same name and operations like before. Stock sales are a viable alternative to a merger, where the buyer purchases all outstanding shares directly from the shareholders of the company that is targeted. This is less complicated than a complete merger but it may violate the anti-assignment clauses in existing contracts and require consent from third parties.