As your company begins to grow, you begin to look for ways to make sure it's growing in the right direction. You want to maximize its profit and get an edge on the competition, building a reputation for being the best and brightest. To do this, you may have considered merging with or acquiring another company to create a new company that is even better than the sum of its parts. But, without utilizing the tools of advanced planning, bringing together two different companies with two different cultures can be a recipe for disaster. That's why using the services of a professional mergers and acquisitions accountant is a smart thing to do. The business professionals at Daleyn Accountancy understand mergers and acquisitions and can anticipate your needs to create a workable plan that takes you forward, without having to experience too many obstacles in the process.
Difference Between Mergers and Acquisitions
Sometimes people in business use the terms "merger" and "acquisition" loosely as if they were the same thing. In reality, they are not the same, the two are completely different types of business dealings. In a merger, two companies of similar size join together to form a new company. Both companies give up their stock, and a new stock, representing the new company, is issued. In this setting, the leaders of both companies generally agree that the merger is in the best interests of them both.
An acquisition, however, is something different. An acquisition occurs when one company takes over another. The owner of the one company is the new leader, and the company that is taken over no longer has stock, or even really exists as a legal entity. There are different kinds of acquisitions, and some are more hostile than others. A company that is "acquired" by another may keep its company name, and there may be some financial advantages for this target company to participate in the acquisition. But in some acquisitions, many employees lose their jobs and the scene can be a dismal one, even for loyal employees who have been working at the company for decades.
Risks of Mergers and Acquisitions
The failure rate of mergers and acquisitions is, unfortunately, high, and usually, the failure is due to lack of due diligence and lack of planning. Another enormous factor in the failure of merger and acquisition efforts is the simple lack of communication between the parties involved. If the leadership of the involved companies cannot make the employees and others who make the company work understand the benefits of the merger or acquisition, morale is poor, and productivity slows. If one company merges with or acquires another without knowing what liabilities are involved, that lack of planning and due diligence will eventually show up in lost profits for the company.
Call to Schedule a Free Consultation with a Professional Mergers and Acquisitions Accountant Today
If you're interested in learning more about mergers and acquisitions, call to schedule a free consultation with an experienced accountant today. At Daleyn Accountancy, our professional certified public accountants can help you develop a solid plan for conducting a merger or acquisition that is based on thorough due diligence and sound communication. Call us at 818-696-0866 and let us help you create a plan for a merger or acquisition that takes your company in the right direction. We serve Encino, Los Angeles, Thousand Oaks, Camarillo, Agoura Hills, Woodland Hills, Calabasas and surrounding communities.