There is a misconception that mergers and acquisitions never generate value. Numerous online sources claim that anywhere from 70 - 90% of M&A deals fail, but this metric is based on a snapshot of the whole process. This isn’t to say mergers and acquisitions always succeed, but they don’t inherently fail– poorly planned M&A deals don’t create value. But what constitutes an ill-conceived deal?

Proper Exit Planning:

Selling your business isn’t a quick procedure, and rushing it could ruin the outcome. Several stages of exit planning culminate in a three-year process colloquially known as the 1,000-day exit plan. Research shows that a proper exit strategy leads to better results post-acquisition. Take a deep breath, slow down, and don’t rush the outcome.

Cultural Synergy:

During your exit planning process, it’s important to evaluate your company’s culture to discern any potential synergistic issues. Cultural incompatibility during a merger absolutely can decrease the value of both companies. Many large-scale mergers have failed due to this exact issue. 

Be Strategic:

It’s important to stay clear-headed and strategic when exiting. Emotions, greed, and ignorance can create unrealistic expectations for your exit. It’s normal to feel strongly about selling your business when you’ve put so much effort into it. It’s crucial you educate yourself on the value of your business and connect with experienced M&A professionals for guidance. 

Conclusion

It’s a misinterpretation that mergers and acquisitions only decrease value, but it can indeed be tricky to generate value. You’re an expert at running your business, but selling your business is a whole different ball game. Leave it to the professionals at Stony Hill Advisors to help you form a detailed exit strategy. Contact us today!