M&A is a viable method for companies to expand their geographic reach, outpace competitors and gain access to the latest technology, employees or assets. However, M&A is also a lengthy and time-consuming process. Due diligence can take several months to analyze potential target companies. This requires a thorough analysis of operational, financial and commercial information. It can be more difficult to succeed if the company is situated remotely and the same steps need to be taken but with additional challenges in communication and collaboration.

Preparing for Day One

When a company gets acquired, the very first day of operations (known in M&A terminology as «Day 1») must be prepared. This includes establishing corporate structures, integrating back office infrastructure and IT systems, and explaining to employees what will happen in the future. The M&A team also has to make sure that all the important documents are available, including legal contracts, agreements, and financial models.

A shared Vision

A successful M&A strategy requires a clear understanding of the differences and similarities between the two parties both in terms of business goals and culture. This is particularly important when two companies merge and buying out remotely. A new company without an enlightened vision could lose its direction, and create friction at work.

M&A is a high-stakes process which often results in unintended consequences. Particularly the sunk cost myth can force M&A decision-makers into agreement traps where they are forced to sign an arrangement that is less than the alternative.

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