M&A in Remote Locations

M&A is a great way for businesses to expand their geographical footprint, surpass competitors and gain access technologies employees, assets or even employees. However, M&A is also a time-consuming and intensive process. Due diligence can take months to analyze potential target companies. This requires an in-depth analysis of operational, financial, and commercial data. The process can be more difficult if a business is remote, as many of the same steps are required for success but with added difficulties in collaboration and communication.

Preparing for Day 1

When a business is acquired, it must establish the foundation for its official first day of operation (known as “Day 1” in M&A jargon). This includes establishing company structures, integrating back office infrastructure and IT systems, as well as communicating to staff what will happen in the future. The M&A team must also ensure that all important documents, such as legal agreements or contracts, financial models are in place.

The creation of a common Vision

A successful M&A strategy requires a thorough understanding of the similarities and differences between the two parties both in terms of business goals and culture. This is particularly crucial when companies are acquiring and merging from a distance. A new organization without a clear vision can lose its direction and cause friction at work.

M&A is a high-risk procedure that can have unintended consequences. The sunk cost fallacy, particularly, can result in M&A decision makers to fall into agreements where they sign to an agreement which is more costly than the best option.

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