When two business owners decide to merge their businesses, both will benefit from the transaction as long as the marriage of companies is well-suited. As discussed in Part 1 of this series, the benefits of a merger may ultimately be quantified in financial terms but their effects may also be linked to broader issues (mental well-being of workers, revitalization of an industry, etc.)

Business owners may be intimidated by the terms “merger” or “acquisition,” and with good reason; both words carry an aggressive connotation, especially to an owner who is emotionally invested in his or her business. A merger occurs when two companies of similar size join to become one business under the same owner and operator. A business owner’s apprehension about a merger is best quelled when the new partner is extremely trustworthy, or when the promise of financial gain is so great that partnering is worth any risk.

The Confidential Offering Memorandum (COM) is a document used for selling a business. Typically drafted by an M&A intermediary, this document includes all pertinent information that a buyer may need to know when seeking more information about a business that is being offered for sale, and it acts as an introductory package of information for the business for sale.