Mergers and acquisitions are a big part of corporate finance. One plus one equals three, is the equation of a merger or an acquisition. Generally, the reason behind a merger or acquisition is that two companies are more valuable together than separate combines join together. We will work our hardest to ensure that you have a strong company so that you are able to help create a more cost effective and competitive company. We’ll be there with you from the beginning until the end, and long after that.
Although mergers and acquisitions are often seen as synonymous, they are actually slightly different. A merger occurs with two firms that are roughly the same size, who agree to form a single company rather than remain separately owned. On the other hand, an acquisition is when one company takes over another and establishes themselves as the owner.
MERGER AND ACQUISITION EXPLAINED
There are five main types of mergers, including a horizontal merger, vertical merger, market-extension merger, product-extension merger, and conglomeration. A horizontal merger is when two companies are in direct competition but share the same product markets and lines. A vertical merger generally involves a customer and company, or supplier and company, merging together. A market-extension merger is when two companies that are in different markets but sell the same products. A product-extension merger is two companies that are in the same market but sell different, but related products. Lastly, a conglomeration is two companies that have no prior common business areas.
Mergers and acquisitions, both, are because of companies seeking efficiencies, enhanced market visibility and economies of scale. In an acquisition, there is no exchange of consolidation or stock. Acquisitions can be congenial or they can be hostile. We aim to be there for you no matter what. We’ll do our best to ensure that you find good companies to invest in and merge or acquire. We’ll determine the comparative ratios, including price-earnings ratio, and enterprise value to sales ratio.
We will develop clear strategies that are completely bespoke to the client, before implementing the strategy and helping with the negotiation process in order to cut the best deal. Keeping fully up to date with the current financial climate we can ensure that we stay one step ahead. Our accountants cover various sectors and can work with corporate clients on varying levels with confidence and ease. We’ll also research the replacement costs that it would take. As a key valuation tool, we also evaluate the discounted cash flow which uses a company’s estimated future cash flows to determine its current value.
Our models and strategies help a company to build and execute a merger or acquisition. We bring our expertise to develop acquisition strategies, acquisition screenings, strategic due diligence, merger integrations, joint alliances and ventures, and separations and divestitures. No matter what you’re looking for, our team at The Accountancy Solutions is sure to find a strategy that works best for you and your company.