Corporate Finance

Mergers & Acquisitions

Mergers and acquisitions involving privately held companies entail a number of key legal, business, human resources, intellectual property, and financial issues. To successfully navigate a sale of your company, it is helpful to understand the dynamics and issues that frequently arise.

At Hatem CPA we perform the consolidation of companies referring to Mergers and Acquisitions. Differentiating the two terms, Mergers is the combination of two companies to form one, while Acquisitions is one company taken over by the other. M&A is one of the major aspects of corporate finance world.

* M&A Valuation Is Negotiable to understand the offered price and valuation

* Mergers and Acquisitions Can Take a Long Time to Market, Negotiate, and Close

* Sellers Need to Anticipate the Significant Due Diligence Investigation

* The Seller’s Financial Statements and Projections will be presented

If a buyer could only ask for one representation of a selling company in an acquisition agreement, it is likely the buyer would ask for a representation that the financial statements of the selling company be prepared in accordance with IFRS, consistently applied, and that the selling company fairly present the results of operations, financial condition, and cash flows for the periods indicated.

* Employee and Benefits Issues are considered

* Intellectual Property Issues is also required

Some of the involvement of two merging companies:

-Vertical merger: A firm and supplier or a firm and customer.

-Horizontal merger: Two individual and competing companies who share markets and product line

-Product-extension merger: When two companies merge who sell related products

-Market-extension merger: Two companies who sell practically identical products, crossing different markets

-Congeneric mergers: When two companies merge that serve the customer base in different ways.

-Conglomeration: Two businesses who have nothing in common in terms of business area.

-The mergers that exist in categories are:

Consolidation mergers. This when a merger occurs, and a totally new company is formed, with both companies being bought and combined.

Purchase mergers are when one company is bought by another.This type of merger is often preferred by acquiring companies as it can often provide them with a tax benefit.