March 11, 2010, 12:50 pm
  
|
Mergers and Acquisitions (M&A)What is a merger?
 A merger is an economic term meaning the combination of two companies into a larger company. It is a tool used by companies for the purpose of expanding their operations often aiming at an increase of their long term profitability. A merger is generally made voluntarily or through mutual consent involving cash payments given to the target company or through stock swaps which allow both parties shareholders to share the risk involved with the merge. Sometimes a merger is more like a takeover or acquisition but with a new combined company name and logo. This process can be complicated and overwhelming for both sides, but George and Company works hard to ensure an easy transition and to minimize any interruption for either business so that it can continue to run successfully until the time of the merger.
What is an acquisition?
An acquisition, sometimes called a takeover, is the purchase of a target company by another. Typically a larger company purchases a smaller company either through friendly negotiation or as a takeover; however in some cases a smaller company will gain management control of a larger or more established company and combine the two entities in what is called a “reverse takeover” effect.
How does one company acquire or purchase a second company?
There are a couple ways to acquire a company. One way is through the purchase of the shares of the targeted company gaining control over its assets. This type or transaction makes the buying company not only gain control of the assets but also any financial problems or risks associated with that company.
A second way to acquire a company is for the buyer to purchase the assets of the targeted company. If the buyer purchases all of the assets, the target company is bought with a clean slate and the sell-off cash is given back to the shareholders through liquidation or by dividend. Often a buyer will not purchase all of the assets and instead buy specific assets of the company in order to avoid past or future risks and liabilities. The downside to purchasing a company in this manner is the tax imposed on transfers of individual assets. Stock transactions, however, generally have little to no taxes for the buyer or seller shareholders.
The above two transactions refer specifically to the purchase of larger companies. Smaller businesses have related processes such as the purchasing of one companies assets; however stock transactions may or may not be involved. George and Company will assist in every step to ensure the acquisition is a smooth process handled professionally and thoroughly.
How are M&A related?
Mergers and Acquisitions or M&A is an economic term that refers to the selling, buying or combining of two or more companies to assist with the management, growth, finance or fiscal opportunities of a company in any given industry or market without the company having to develop a second business entity from square one.
How are M&A different?
A merger is a combination of two companies either in the same, similar, or different industries. An acquisition is the purchase of a company by a larger or smaller company. Mergers and Acquisitions also differ in how each is financed. Whether a company is purchased or combined with a second company through cash, financing, or a mix of the two may change whether it is professionally considered a merger or an acquisition. George and Company can help in defining each business transaction, how it can be completed, and exactly what must be accomplished in order for it to be successful.
How can George and Company assist with M&A?
George and Company has a staff of highly educated business brokers with years of experience in the industry. We will assist in clarifying variables, risks, and benefits involved in each decision and step required in the total process of a merge or acquisition. We will facilitate marketing through direct-calling campaigns, personal contacts, and other forms of advertising. More importantly we will adequately valuate any business involved in a possible transaction so you know the history and present condition of a business before a merge or acquisition. We provide a due diligence service that ensures an easy transition with minimized business interruption. 
|
