Mergers and acquisitions, two very similar but very different business transitions. Mike Anderson, Managing Director at Bridgepoint Investment Bank broke down the difference in the most recent issue of the Midlands Business Journal. Anderson was asked to break down these two ideas and how companies should approach a sale, by Lee Nelson, staff writer of the Midlands Business Journal.
In the article, Anderson highlighted that “Mergers can also be used as a euphemism for an acquisition as it can sound better to the marketplace. The difference is subtle, but different nonetheless. Most acquisitions in the middle market happen because a smaller firm is struggling with profitability or changes in the market.” When it comes to a time that a small business is barely managing to grow or sustain its current position in the marketplace, the idea of a sale might be the best option for the brand. And that is when the owner must decide, is it best to sell the company through an acquisition, or is it best to sell through a merger. Anderson, along with colleagues from his industry broke down this concept in-depth to help owners answer that question
Another topic that was discussed is what the transition period might look like for a business during this high stress event. “Selling a business or merging a family-owned business is a once-in-a-lifetime event.” Anderson continued, “By engaging with an investment banker, you can avoid many pitfalls that the owner is likely not aware of in the process.” Employees continuing on with the company after the owner makes the deal, underestimating the day-to-day or year-to-year challenges are a couple of items that owners selling a company for the first time might need help with from a skilled investment bank.
Bridgepoint has played a part in over 115 different transactions. Anderson, along with the rest of the Bridgepoint Investment Bank team, have come across just about every challenge or trick that may come with a first time seller.
Bridgepoint Investment Banking provides advice to companies considering selling and access to a wide variety of capital resources. Contact us for a no-obligation review of your situation to determine if a merger or an acquisition is right for your business.
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