Mergers and Acquisitions

Consultancy

The dynamics of the market, driven by an increasingly competitive environment, have led to a global rise in mergers, acquisitions, and restructuring operations.

However, are small and medium-sized companies prepared for this phenomenon?
Are these companies well-structured to manage a succession or sale process? And what impact do these operations have on family assets?

STREAM has a multidisciplinary team capable of supporting companies and business owners facing these challenges, providing guidance throughout the entire merger, acquisition, or restructuring (M&A) process, from the preliminary phase to the final implementation.

Some estimates suggest that 20% to 30% of announced M&A operations ultimately do not go through.
What are the reasons behind the failure of these operations?

- Contingencies identified during Due Diligence that change the perceived value or risk of the transaction;
- Discrepancies in the company’s valuation or shifts in market conditions;
- Regulatory and antitrust issues;
- Strategic changes.

Did you know that over 50% of M&A transactions fail? Why do they fail?

- Experts point to two critical stages in an M&A process to explain this: the Pre-Acquisition Phase and the Post-Acquisition Phase.
- A lack of strategic clarity and undefined objectives driving the operation are some factors that can lead to failure, which must be addressed during the pre-acquisition phase. Another reason for failure is insufficient planning for the post-acquisition phase, namely the integration phase. Integration should be conducted promptly, ideally within the first 100 days following the transaction’s close."

Risk Factors

- Poor company valuation; unrealistic price expectations
- Post-sale conditions
- Unidentified contingencies
- Changes in market conditions
- Lack of transparency
- Decline in company performance
- Misalignment between accounting and management methodologies
- Lack of tax and legal planning
- Lack of internal alignment

How to Mitigate 

The preparation phase is essential to mitigate the main factors of failure!

- Prior analysis of market conditions;
- Timely identification of key contingencies;
- Identification and substantiation of the primary differences between accounting values and management values.

Proper planning of the operation addresses investor concerns, ensuring a stronger position during negotiations, which helps streamline the process, improve contract conditions, and enhance the company’s valuation."

Brief Quiz

  • Do you feel that your company is prepared for a restructuring, merger, or acquisition operation?
  • Are you aware of the potential tax impacts of such an operation?

 

Quiz