Planning a merger requires careful research and consideration of your existing business and of the business with which you seek a merger. This process is called due diligence. You will also need to amass a team of merger professionals to ensure that the due diligence, negotiation and contract processes go smoothly and in your favor.
Instructions
Indentify Your Goals
1. Discuss exactly what you hope to gain from the merger with your other corporate officers. The type of merger you will plan depends largely on what you hope to gain. When you are only looking to acquire the assets of another company, you may want to plan a "cash for assets" buyout rather than a traditional merger.
2. Search for a company that would satisfy your goals. Turn to investment banking professionals to help you identify potential merger partners.
Conduct Due Diligence
3. Create a visual representation of the corporate structure of the company with which you wish to merge. Include all parent and subsidiary businesses related to the target corporation, as these other entities can affect the nature and rules of merger.
4. Compile a list of all of the states where the target company does business. The company is subject to lawsuits and to the laws of each of these states.
5. Contact the Secretary of State of the state in which the target company is incorporated. The target's articles of incorporation will be filed there. These documents will give you necessary information on the structure of the company, the amount of issued and reserved stock and the bylaws and restrictions the business may have placed on itself.
6. Request copies of accounting and tax records for the past 3 years or so from the target company. These will aid you in developing a picture of the worth of the company.
7. Ask your tax attorney to review the tax implications of a merger. This will help you develop the most effective approach to merging.
8. Research the real and intellectual property holdings of the target corporation. Understanding the value of property, trademark and patents owned by the target company will help you plan how much to offer in exchange for the merger.
Approach the Target Company
9. Ask your lawyer to draft a confidentiality agreement to cover all information exchanged during the merger negotiation process.
10. Decide what type of payment would be the best for you to offer for the merger. Discuss with your accountants and lawyers whether cash, stock or other considerations would benefit your company most.
