Mergers & Acquisitions Step 1: Formulating

In case you missed our overview of the M&A process, check it out here. In that video, we discussed the five steps of the M&A process: Formulating, Locating, Investigating, Negotiating, and Integrating.

This video is all about the first step in the M&A process, the Formulating step.

When formulating your strategy for your next merger or acquisition, you first need to define your objectives. What is your overall business strategy? What is your vision for your business?

After you've defined your strategy, you need to establish your acquisition criteria. This is simply the criteria you will establish for what kind of business you would like to acquire. In other words, you need to define what you are looking for.

After you've defined you've established what you are looking for, you must then set a budget. How much are you willing to spend to acquire the new business? This will also go into how you will finance your acquisition. To learn more about the different types of  financing a deal check out this blog.

The next part in the Formulating step is assembling your team. Every M&A transaction is going to involve a number of subject matter experts who are going to assist you in discrete parts of the process. Legal, financial, operational, HR, tax, and accounting experts all play a critical part in M&A.