Mergers and acquisitions (M&A) are the process of consolidating companies or major assets of companies through financial transactions. Due to the complexity of the M&A process, it’s easy to become overwhelmed and misinformed, resulting in hesitation. So, let’s explore some common M&A myths and the truth behind them.

Common M&A Misconceptions

• Mergers and Acquisitions are Only for Large Corporations: Companies of all types participate in mergers and acquisitions! Large companies may make high-profile acquisitions that make the news, but small and medium-sized companies are not exempt from M&A. It isn’t unheard of for smaller companies to acquire larger ones to unlock new opportunities and growth.
  
  
• M&A is a Method to Get Rich Quick: Mergers and acquisitions are a very time-consuming process. It’s important to prepare for a 1,000-day journey from the day you decide to sell your business to the moment you close the sale. Rushing the process can lead to a lower sale price, synergistic issues, and financial difficulties. 
  
  
• Organic Growth is Better than Acquiring: Organic growth is valuable, but it's a gradual process. Strategic M&A decisions can lead to accelerated growth and new market reach. Overall, these changes manifest as a higher valuation of your business.
  
  
• M&A Leads to Job Losses: While this belief is not completely unfounded, many mergers and acquisitions can fortify job security and even create new job opportunities. This brings financial stability to your employees and new growth opportunities to your business.
  
  
• Mergers and Acquisitions are Too Complicated: The mergers and acquisitions process can be overwhelming. However, proper consideration and planning will make everything easier. It’s important to connect with an experienced financial advisor for a smooth transition. They’re there to answer questions and guide you through the M&A process!

Conclusion

Clearing up mergers and acquisitions myths is integral to understanding M&A. M&A is a strategy for businesses of all sizes. This in-depth process takes time, but can benefit your business immensely through accelerated growth, higher valuations, and a smooth exit when the time comes.

It’s important to be well-informed before deciding whether mergers and acquisitions is right for you. If you have more misconceptions you’d like cleared up, contact us to speak with one of Stony Hill’s expert advisors today.