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ESG: the key to strong corporate reputation and customer loyalty
As we have stated many times before, in today's business climate, a strong focus on Environmental, Social, and Governance(ESG) factors is critical to building a solid corporate reputation and strengthening customer loyalty. Do you score well on sustainable and ethical business practices? Then you often enjoy greater trust from your stakeholders, including investors, customers, and your own staff.
Ensure sustainability policies are well embedded and enforceable
Essential to strengthening the trust of your stakeholders is a well-anchored sustainability policy. Not only must it be well anchored, clear and understandable on paper, it must also be actionable for and implemented by everyone in your organization! A few elements of an effective sustainability policy might include:
- Clear objectives and clear, well-organized action items in the areas of the environment, social responsibility and good governance.
- Transparent communication about the progress and results of everything done in the field of sustainability.
- Involve all employees in achieving sustainability goals, don't let it become a trick of management.
- Regular evaluation and adjustment of policies based on new insights and developments.
Attract the new generation of workers
Attracting the new generation of employees is another crucial and not to be underestimated consideration. Companies that take sustainability issues seriously and pay attention to people and the environment are more attractive to this group. In a time of tight labor markets, this can be a significant competitive advantage. Young professionals are not merely looking for high pay and extrinsic benefits. They increasingly value meaningful work and the opportunity to contribute to a better world. Companies that recognize and actively address these needs have an advantage in attracting and retaining talent.
ESG requirements in the supply chain
For small and medium-sized enterprises (SMEs) supplying large corporations, it is critical to meet Environmental, Social, and Governance (ESG) standards on all fronts. Indeed, large corporations are increasingly subjected to stringent sustainability laws and regulations while also setting high standards for their suppliers' sustainability performance.
To maintain and strengthen their position in the marketplace, SMEs must be able to demonstrate that they are serious about their ESG commitments. The ability of SMEs to meet these requirements directly affects their ability to retain customers and win new business. It is no longer enough just to provide high-quality products or services; your organization must also be transparent about its sustainability efforts and pursue ethical business practices, both nationally and internationally.
Companies that are sincere and open about their sustainability efforts and committed to ethical business practices not only have increased customer loyalty, but also build a better brand reputation and a firmer position in the marketplace. They are seen as trusted partners who strive not only for profit, but also for positive social impact and environmental protection. These companies can stand out as forerunners in sustainability and ethics, making them more attractive to both customers and investors who value corporate responsibility.
Conclusion
A strong focus on ESG is no longer optional. It is an absolute necessity for companies that want to build a solid reputation and strong customer loyalty. By embedding sustainability and ethical business practices, you strengthen the trust of your stakeholders, attract the new generation of employees and remain attractive to major customers. Investing in ESG is therefore not only good for people and the environment, but also for the future sustainability of your company.
What can M&A/FIRM help you with?
Do you want to take your organization to the next level in terms of ESG requirements but don't know where to start? M&A/FIRM offers an ESG scan and report tailored to your company. We ensure that your ESG scan and report are prepared quickly and accurately. They are also easy to understand; we want everyone in your organization to work with them! You can read more about this service in this article. Would you like more information, or would you like to request an ESG scan for your organization? Please contact Nicola Fletcher Lord (E: nicolafletcherlord@manda-firm.international T: +31611369089)
Sharpen your sustainability strategy with a custom ESG scan
Attention to Environmental, Social, and Governance (ESG) factors is growing worldwide in today's business climate. Large companies, small and medium-sized business owners; increasingly, they are being judged on their sustainability, social responsibility and good governance efforts. A good thing, but it costs you as an entrepreneur extra time and effort to get this done. At M&A/FIRM, we understand this challenge and offer a solution specifically tailored to companies like yours: a customized ESG Scan, specifically for your company. Get started with sustainability and corporate social responsibility without extra stress or major time commitment.
Why choose an ESG scan?
The sustainable handling of raw materials and ethical business practices with respect for people and animals within one's own supply chain are becoming increasingly important. There is already a lot of legislation and even more (European and national) legislation in the making. From a certain size onward, companies must also report on their ESG performance,. This reporting, if done properly, offers valuable insights to investors, stakeholders and customers about a company's commitment to sustainability and corporate social responsibility. These reports help assess potential environmental, social responsibility and good governance risks and opportunities within an organization. In addition, they help improve a company's reputation and increase its attractiveness to potential investors. With our customized ESG scan, you will know exactly where you stand and what steps you are taking and have yet to take to improve your ESG performance.
Fast, reliable and understandable: M&A/FIRM's ESG scan
Companies want ESG reports that are fast and reliable, without compromising on quality. We understand this like no other. Our experienced professionals ensure that your ESG scan and report are prepared quickly and accurately, with attention to the specific needs of your company and the requirements of (international) legislation within your supply chain up to the end customers. In addition, we strive for comprehensibility: what good is a report if you don't understand what it says? Then it becomes just another paper tiger that is viewed once and then gathering dust in a closet for years. Our reports are accessible to all stakeholders, including your own staff, customers and investors, and provide clear insights into your sustainability performance and goals. This not only increases your company's attractiveness as a supplier, but also makes you interesting to potential investors and buyers of your company.
Stay up-to-date
We can't stress it enough: make sure you are and stay abreast of constantly changing ESG legislation and trends in the market. This is the only way to stay compliant and avoid surprises. At M&A/FIRM, we are always on top of the latest developments in this area. We provide you with up-to-date and relevant information so that you always have an edge in the modern business world.
Conclusion
ESG scans and ESG reports are critical for companies looking to thrive in an ever-changing business landscape. With our customized ESG scan and report, you meet the requirements of sustainability and corporate social responsibility. And in doing so, you also comply with (international) legislation such as the German Lieferkettengesetz, for example.
Learn more
Contact Nicola Fletcher Lord, (E: nicolafletcherlord@manda-firm.international T: 31611369089) to learn more about how we can help you with your ESG scan and reporting needs.
Selling or acquiring a business in the age of sustainability
Selling or taking over a business is not something you do lightly. It requires an intensive period of preparation. And especially now, when the world of business acquisitions and sales is changing dramatically. With the emergence of ESG factors - environmental, social responsibility, and good corporate governance - as core criteria, the process has become more complex. But it also offers more opportunities! At M&A FIRM, we understand these dynamics, and we ensure that you, the entrepreneur, are fully prepared for this new reality.
Crucial: preparation time
Thorough preparation is critical to success. In M&A/FIRM, this is the PREPARE phase and ideally we begin this two years before the planned business acquisition or sale. This is a phase we pay close attention to. We dive deep into the soul of your company, looking beyond the numbers, to determine its true value. After all, that true value is more, much more, than the sum of your operating income and free cash flow. In this PREPARE phase, we identify together the ESG factors where improvement is needed, so that your company not only thrives now, but also in the future.
ESG is indispensable in your business valuation
In today's era, a company's value is increasingly determined by its performance on sustainability in the supply chain and respect for the environment and human and animal welfare, ESG performance. But how do you determine how ESG-proof a company is? Is your companyf where it comes to ESG perhaps unknowingly leaving gaps? You will notice this not only commercially, but also when you sell your company. The value of your company will fall if you do not perform well, so the purchase price will be considerably lower. After all, the new owner faces substantial investments after the purchase if you underperform. Think of insulation of the business premises, finding new, more sustainable suppliers or raw materials, or, for example, straightening out a skewed remuneration policy. Poor performance on ESG criteria can thus lead to lower company value and reduced attractiveness to buyers. Therefore, whether you are a buyer or seller, it is essential to have a deep understanding of your own company's ESG performance. In the PREPARE phase, we will research your company's ESG scores together (the baseline measurement) and determine where we will improve them. Examples include tightening agreements with your suppliers with regard to improving their ESG performance, implementing a human rights codex within your company, setting up a monitoring and reporting system and introducing quality audits. Additional benefit? You become more attractive as a supplier to high-quality customers.
Understanding and leveraging data
Together, we ensure that the right information is available and that everyone in the organization recognizes the importance of treating each other respectfully and sourcing ethically. This is essential for creating a corporate culture that embraces ESG values. Because you can show such beautiful numbers, if this is not supported in an organization, if your employees do not understand why they should pay attention to this and report on it, it remains a wash. We are going to create awareness (insofar as it is not already there, of course), we are going to ensure that the right questions are asked and the right actions are taken.
The next phase: MERGE
In the next phase, the MERGE phase, we start looking for a suitable buyer or seller for you. This is the most intensive part of the whole process and goes from looking for the perfect candidate to closing the deal. Believe it or not: we are not looking for the quick win here. Anything but that, in fact. Our goal is to find a match that is not only financially attractive, but can also develop your business in a sustainable way. We will perform ESG due diligence at this stage in addition to the required legal due diligence. This applies both when we act for a buyer, as well as for a seller. In an ESG due diligence, we gain insight into the ESG performance of both parties. There is already a lot of legislation and even more is in development (think of the ESD3 directive [LINK TO ARTICLE ON LAWFIRM WEBSITE]), so testing compliance is one of them. But also generally, we want to have a good picture of the state of play, so that we can assess what challenges await in the future. So we look at the ESG performance and whether the potential candidate might be facing ESG risks so that you can take into account the possible legal and financial consequences in your decision making.
Our multidisciplinary approach means you get all the advice you need from one source. As a result, the process runs smoothly and your daily business operations are less disrupted. As an entrepreneur during this intensive MERGE process, you can simply do what you do best: run your business. We take care of the rest.
The importance of ESG reports
ESG reports are no longer a "nice to have"; they are an essential part of modern business operations. They provide valuable insights for investors, stakeholders and customers on how your company is performing in terms of sustainability and social responsibility. These reports not only improve your company's reputation, but also make it more attractive for future investment. During the PREPARE phase, we already prepare an ESG report for your company. This report will be updated and modified throughout the process.
Why choose M&A/FIRM?
We can cite several reasons for this. But the most important ones are:
- We have in-depth knowledge of ESG factors and how to integrate them into the business acquisition or sale process.
- Our approach is holistic and customized, focused on the long-term success of your business.
- We offer all the necessary advice from a single source, making the process as efficient and effective as possible for you.
Investing in a sustainable future is not only good for the planet, it's also a smart business decision. Let M&A FIRM guide you through this crucial process so that your business not only thrives today, but also tomorrow. With us, you are not alone; together we will build a sustainable future for your business.
Want to know more?
Want to learn more about this topic? Or would you like to hear more about what M&A/FIRM can do for you on ESG? Feel free to contact Esther Tromp (E: esthtertromp@manda-firm.international , T: +31655741267).
ESG and the impact on enterprise value
It's no secret that Environmental, Social, and Governance (ESG) factors are playing an increasing role in business. But what many people don't know is that ESG affects not only your contracts in the supply chain, from raw material supplier to end customer, but also the value of your business. In this article, we already addressed the role of ESG in corporate acquisitions. In this article, we already addressed the role of ESG in corporate acquisitions. In the following article, we take a closer look at the influence of ESG factors on the value of a company.
Cost savings with ESG
Are you effectively implementing a sustainability policy in your organization? You are doing so smartly! It can bring significant long-term benefits to your business. Focusing on sustainability and social responsibility not only saves you costs, but it can create value and growth opportunities.
Integrating a policy for ethical and sustainable business practices into your procurement process and business operations can lead in the long run to a more efficient business process, cost savings and more sustainable relationships in the supply chain with higher quality suppliers and customers.... Consider, for example, reducing your own energy and resource use, minimizing waste streams and emissions, and optimizing your business processes. In your supply chain, setting the right sustainability requirements for your suppliers ensures that they too remain a more reliable and stable partner in the future. If you have all this in order, you will also see that you become more attractive to higher-quality customers who are willing to pay for a company that has its processes in order and operates with respect for people and the environment.
An additional advantage is, you thereby secure the future of your own business. You also make great strides in increasing the value of your business. You not only become more attractive to potential buyers, but also receive more money in the event of a sale in the future.
Risk management
One of the main ways ESG affects a company's value is by managing risk in that area. Both within your own company, as well as within your supply chain. Companies that are smart about ESG can save costs in the long run. They also have significantly less risk of fraud and their supply chain is more stable. This attracts more investors, who are consciously looking for companies that are future proof by taking sustainability seriously and mitigating risks.
A well-anchored ESG policy in the organization strengthens your company's resilience. It makes your company better prepared for unforeseen events and changes. By paying attention to dealing with people a their environment, think diversity and inclusion, ethical leadership and transparent governance, companies can guard against reputational damage, legal disputes and operational disruptions that can result from workplace disruptions caused by poorly managed social and ethical issues.
Reputation
A strong focus on ESG helps build a solid corporate reputation. The better you score on sustainability and ethics, the greater your customer loyalty. A well-anchored and implementable sustainability policy strengthens the trust of your stakeholders, including investors, staff and customers. A company that handles sustainability issues and people and the environment well is more attractive to the new generation of employees, especially in times of staff shortages. Moreover, for SMEs supplying large corporations, they can only continue to serve these customers if they are ESG-proof on all fronts. Indeed, large companies are increasingly required to comply with legislation in this area and place high demands on their suppliers. Companies that are sincere and open about their sustainability efforts and committed to ethical business practices at home and abroad have, in addition to increased customer loyalty, a better brand reputation and a firmer position in the market.
Investors pay attention to ESG factors
Investors are becoming increasingly aware of the importance of ESG factors when making investment decisions. Companies that take sustainability seriously and actively mitigate risks in that area are seen as more attractive to investors looking for long-term value creation and sustainable returns on their investments. So entrepreneurs who design their operations and supply chain sustainably and ethically have easier access to capital at lower financing costs. Banks are also increasingly paying attention to ESG criteria when granting loans. So investing in ESG also pays off for an SME on all fronts!
Take action now
ESG affects several factors that determine a company's value. By taking ESG integration seriously and proactively managing risk, your company can not only cut costs and improve its bottom line, but also manage risk, create value, enhance your reputation and attract investors seeking sustainable growth. ESG is playing an increasing role in business. Take it seriously and integrate it into your business strategy. M&A/FIRM can help you do this, for example through our custom ESG scan and reporting, which will help you meet the requirements of sustainability and corporate social responsibility.
Want to know more?
Want to know more about this topic? Or would you like to know what else M&A/FIRM can do for you in the field of ESG? Feel free to contact Esther Tromp (E: esthertromp@manda-firm.international, T: +31655741267)
The role of ESG and sustainability in corporate acquisitions
In today's society, unsustainable business practices affect a company's future profitability. In the world of private equity and investors, portfolio composition choices are already largely based on what a company's ESG score is like.
Sustainability is no longer an afterthought in SME mergers and acquisitions either. It has now become one of the most important factors in an acquisition. Whether it's the choice of whether companies go into business with each other, knockout factors in a due diligence investigation or as a topic at the negotiating table when it comes to warranties and indemnities.
What is ESG?
ESG stands for Environmental, Social and Governance,in Dutch environment, people and governance. It is also summarized under the term "sustainability. In business terms, it means the sustainability of a company in all areas, from its impact on the environment to its dealings with people throughout the supply chain. ESG legislation includes all laws and regulations on the topics of environment, people and governance, and that's very broad. It basically covers everything about how companies treat their employees, the impact they have on the environment and how they set up their organization and run their business. As a society, we believe that this can be done more sustainably and better. Our ethical standards about this are also changing. Consider the discussions on social media about the abuses in the fashion industry, intensive livestock farming and dumping of waste in poor countries. Want to know more about this? Then read this article.
How does ESG affect company value?
ESG affects several factors that determine a company's value.
- Risk management
Being smart about ESG reduces risk, for example by saving costs in the long run, making the company less susceptible to fraud, and making its supply chain more stable. More and more investors are taking this into account. - Reputation
The better a company performs on the ESG, the better its reputation. That ensures greater customer loyalty, and also makes the company more interesting to employees in times of staff shortages. Moreover, for SMEs supplying large corporations, they can only continue to serve those customers if they are ESG proof on all fronts. - Access to capital
Strong ESG performance makes it easier to raise capital and also discounts capital costs. Investors rate companies that focus on sustainability and social responsibility higher. Banks also pay attention to this.
- Indicator of future success
ESG is increasingly seen as an indicator of a company's future success. Not only in large companies, but especially in SMEs. Companies that score well on ESG often have a better reputation, more stable operations, attract talented employees and are seen as reliable business partners. This leads to better operational performance, higher profits and, in the long run, also more value creation.
ESG in the different steps of the acquisition process
ESG plays a decisive role in corporate acquisitions at various stages of the acquisition process.
- Selection process and company value
On the buyer's side
Already when selecting a potential "target" (the company to be acquired), ESG plays a major role. The value of the target is increasingly determined by the answer to the question of how ESG-proof a company is. If a company makes major gaps in ESG, the value of the company drops and a lower purchase price will simply be paid. After all, the new owner will then still have to make substantial investments: think of insulation of the business premises, finding newer (more sustainable) suppliers or raw materials and correcting skewed tax policies.
On the seller's side
As an SME entrepreneur, you have spent years building your business, perhaps even over several generations. Then you certainly don't sell your business to just anyone. Moreover, you also have an obligation to your staff, to transfer them well to a buyer who will continue to take good care of them. A company that is known to treat its staff badly does not seem like a good option then. But what about a foreign company from the US or Asia that you don't otherwise know? Perhaps it is not unwise to do some research into their ESG scores anyway.
- Due diligence
When conducting due diligence for a potential acquisition, companies should consider ESG risks and opportunities. This includes assessing the environmental performance, social impact and policy structure of the target company. By including ESG factors in the due diligence process, potential environmental, social and policy risks and opportunities are identified in a timely manner. Analysis of these factors allows buyers to identify potential risks that could damage the value or reputation of the target company. - Purchase Price Determination
We mentioned it above: a low ESG score immediately results in a lower purchase price. It does not mean that you have to be the best in class, but certain basic principles have to be in order. Otherwise, you run the risk of getting considerably less for your company than hoped for.
- Value creation
Suppose the ESG score of the company to be acquired is lower than yours as a buyer. Then improving that score after the purchase creates immediate value. Implementation of the buyer's ESG policy and changes in that area with the help of the buyer, can realize cost savings, allow your company to operate more efficiently from now on, bring in better customers and discover new markets. The reverse can also be the case;that the buyer actually adopts the purchased company's sustainability efforts and thereby creates value for its own company. For example, by adopting a revolutionary new, sustainable, more environmentally friendly production method, purchasing different raw materials, and so on. - Stakeholder management
We mentioned this too: companies that score high on ESG are attractive employers for young and talented employees. The young generation has a great need for meaning, even when it comes to work. They want to be proud of the company they are part of. Being conscious of the environment, living conditions and human rights is part of this. Those who have satisfied employees radiate this. This has a direct influence on how customers are treated. Having an eye for your company's impact on the immediate environment ensures that you have a positive image. It also ensures that you have fewer problems when it comes to licensing or other government interference, for example environmental and environmental permits or exceptions.
In short, ESG is of critical importance to companies and investors and plays an increasing role in assessing a company's sustainability and responsibility. In the context of M&A and corporate acquisitions, ESG helps manage risk, create value and manage stakeholders.
Our vision
We believe that sustainable companies are more successful in the long term and that is exactly what we strive for. Therefore, during the PREPARE phase , we pay attention to your company's ESG score and provide targeted advice on how it can be effectively improved in order to remain successful in the long term and thus increase the value of the company.
In the MERGE phase we will, depending on which 'side' you are on, advise you on how to pay attention to the ESC aspects in the due diligence and the ESG score of the target plus the consequences if it turns out to be substandard. The ESG score of the target will also play a role in the purchase price and contract negotiations.
In the INTEGRATE phase , we pay attention to ESG within the framework of the success factors that we believe underlie a successful mode of integration.
Do you have questions about this? Or would you like advice on integrating ESG criteria? Please feel free to contact Esther Tromp (E: esthertromp@law-firm.international, T:+31655741267).
Business acquisition: what to look out for?
A business acquisition is a complicated process involving a lot. A company, with all its employees, is wholly or partially taken over by another company, for example as a strategic move to stimulate growth, strengthen its market position or achieve synergy benefits. The success of a business acquisition depends on several factors, including synergy, proper integration and communication. It all hinges on careful preparation and thorough due diligence.
So: what should you look for in a business acquisition?
Synergy and achievement of strategic goals
One of the most important aspects in a business acquisition is that the two companies are strategically matched. What is meant by this? Think of it as a marriage, where you want your standards and values to match as well. Similarly, the goals, values and corporate cultures of the organizations should be well matched. It is then important to do extensive research beforehand to see if the products, markets and skills present in the company match or complement each other well. This research is crucial to know whether the acquisition is a smart strategic move and whether there is a chance of success.
A business acquisition is not an end in itself. You want to achieve something with a business acquisition: whether it's growth, recruiting staff, gaining margin advantage in the supply chain or adding expertise, production capacity, IP rights or adding new products to your existing portfolio.
Research shows time and again that those who keep their goals firmly in mind when searching for the ideal acquisition candidate are the most likely to succeed. Taking over a company for the sake of taking over or "growing for the sake of growing" often leads to disappointment afterwards.
Timing is also critical. After all, your own organization must also be ready: taking over a company is a major drain on your business. Not only during the acquisition process itself, but also in the period afterwards. It demands a lot of time from part of the management, who already have enough tasks in their own organization. If an acquisition process takes a long time, or if several acquisitions take place in a short period of time, this will distract the attention from the own organization, which can lead to internal problems. Employees notice that their supervisor or manager pays less attention to them. This causes unrest, uncertainty and reduced productivity. You therefore more often see that after an acquisition, one's own turnover declines somewhat.
Financial health
Of course, you don't want to buy a cat in the bag in a business acquisition. It is therefore essential to thoroughly evaluate (or have evaluated) the financial health of the target company prior to the business acquisition. Analyze financial statements, cash flow, debt and all other financial indicators to get a clear picture of the financial situation. But existing contracts and their execution can also lead to financial challenges in the future. Consider customer contracts that may be terminated by the customer in the event of a business takeover, or the delivery of non-conforming products. In doing so, also be sure to uncover any hidden liabilities or risks that could negatively impact the value of the acquisition. This requires thorough due diligence (more on that later).
During an acquisition process, as a buyer of a business you try to get a good picture of the future earning potential of the business. However, this is often a case of taking a long view, if only because the future performance also depends on the successful integration into your existing company and the goals you want to achieve with the acquisition.
Legal/regulatory aspects
Not only will you want to conduct a legal due diligence to identify all risks . The necessary contracts will also have to be drawn up to record all the agreements surrounding the acquisition and the distribution of risks found during the due diligence. Sometimes you may have to file a notification or even obtain a permit in order to make an acquisition. This may be the case if your company or the company to be acquired has a certain size or market position.
Value of business to be acquired
Below the line, it is not difficult
The valuation of a company in a business acquisition is often very secretive and complicated. But at the bottom line, it is not that difficult. Compare it to buying a house: you pay attention to the location, the number of square meters, the state of repair of the house and, above all, how you think you can improve the house in the future (think of a new bathroom, kitchen or laying out a garden). It's the same with buying a business, ultimately it's about future earning potential.
You look at the products or services a company provides, its organizational and financial health, its intellectual property rights, and most importantly, the added value the company brings to your business. Consider, for example, access to new markets (other industries, foreign countries), adding products to your product portfolio, obtaining important intellectual property rights, additional personnel, expanding production capabilities, increased sales and profits, etc. That added value will be different for everyone. While one entrepreneur wants to expand abroad, another entrepreneur is desperate for more capacity to work out his own orders. This also means, as in a marriage or buying a house, that for one person certain weakness is a blessing, while for another it is a burden. Consider a company with a beautiful factory and an overly empty order book. If you have undercapacity yourself, you see an opportunity in this. If you have excess capacity, then it's a burden again.
Due diligence
Of course, you don't want to buy the proverbial cat in the bag. Therefore, in addition to paying close attention to your own ears and eyes, you will want to hire consultants to investigate whether all the promises made about the company are true. Compare it to a building survey when buying a house. Your advisors will look for potential risks and the proverbial dead bodies in the closet. This will involve examining all aspects of the proposed business. Consider finances, legal matters, operational processes, customer base and personnel. But topics such as IT infrastructure, the environment or corporate social responsibility(ESG), for example, are also subjects that are increasingly being addressed. A due diligence investigation helps you identify potential problems or risks and ensures that there are no surprises after the acquisition.
A successful business acquisition runs on good integration planning
Detailed integration plan
Proper integration is the No. 1 success factor for a successful business acquisition. Successful business acquisition requires good integration planning. Even before you take over the business you will have to think about how you are going to make sure that the business to be acquired will be well embedded in your own organization. There is often more to this than meets the eye, even if you initially want the acquired business to continue to operate on its own. There will have to be someone within the organization who becomes the "face" of the new shareholder at the acquired company. Someone who is ready to answer any questions there may be from staff members, for example. What is often underestimated is that a business acquisition is very stressful for employees. It makes them uncertain about their job security, their performance and the future. So reassuring the staff and being there for them is certainly very important.
But there are also practical matters that need to be taken care of. Think of the transition to a new ERP or accounting system, harmonization of working conditions, adjustment of the website, informing customers and suppliers, IT infrastructure, the bank, etc. A lot of practical matters that, if left unresolved, often lead to friction and lack of clarity. As a result, the performance of the acquired company soon starts to suffer.
Lay out the benefits of merging, create a detailed integration plan and designate a team to deal specifically with the integration. Proper planning will keep the operational running and minimize the risks of the transition.
Communication is key
Communicate in a timely, clear and open manner
Be clear and open in your communication during a business acquisition. Make sure all employees are aware of what will happen in the business acquisition and what it means for their role. The consequences of a business takeover can be significant for employees: they may be afraid of losing their jobs, they don't know where they will end up, and they also don't know whether they will be able to contribute to the company in the future, under new management. They become insecure about their own performance. Managers, who were used to making their own decisions in the old situation, may no longer dare to do so, for fear of doing something wrong. If good communication and visibility from the new owner is lacking, uncertainty and "paralysis" sets in. You can guess what this can do to motivation and work morale, and you will soon see that reflected in the turnover figures and turnover of (good) personnel. A situation you obviously want to avoid, so make sure you communicate clearly and in a timely manner so that employees feel involved and know what to expect.
The same goes for suppliers, service providers and customers. They, too, wonder if anything will change for them after the acquisition. Credit limits at suppliers may change, or customers may be reluctant to place new orders. The reverse is also true. It may be that as a new shareholder you feel the need to professionalize matters, think for example of concluding contracts or making firm agreements, where previously this was only done verbally or via email. This can sometimes meet with resistance, but it may also be that the customer or supplier is very happy with it.
Timely, clear and open communication removes a lot of uncertainty and ambiguity and also ensures that things go as smoothly as possible or perhaps even better.
Learn more
Please contact us, we will be happy to help you
Do you have questions after reading this article, or would you like more information? Perhaps you are thinking about a business acquisition yourself? Feel free to contact us, we would be happy to advise you.
PREPARE MERGE INTEGRATE: the approach to M&A / FIRM
PREPARE MERGE INTEGRATE: the approach of M&A FIRM
M&A FIRM's approach is simple and effective. Because when a company is taken over, merged or sold, you have many questions. Different situations come into play and there are different people and agencies that need to be taken into account. Meanwhile, the day-to-day business goes on as usual, which also requires your attention. You still can't split up, but fortunately you have a reliable partner in corporate acquisitions: M&A FIRM. M&A FIRM takes the worry out of your hands and guides you every step of the way. From the moment you first ask yourself "How long do I want?" to the moment of signing at the notary: M&A FIRM is your partner in the next step of your business.
M&A FIRM's approach divides the sale of a business into 3 stages:
PREPARE
Good preparation is half the battle. And this statement certainly holds true where business transactions are concerned; which is why M&A FIRM's approach pays close attention to preparation. Because on both the sell side and the buy side, this preparation determines the ultimate degree of long-term success. For the process to be sustainably successful, it is necessary to think about a few questions early on. For example, how to make the company attractive to (foreign) investors and buyers. Or simply because you want to be ready for that opportunity when it arises. We call this the prepare phase.
In our approach, we prefer to start working with you in the last 24 months before you consider selling or acquiring a business. If you need advice earlier, or a sparring partner, that is of course always possible. Together with you, the entrepreneur, we take all the time we need to properly prepare the business acquisition. Only then will the final sale and transition not be an agony, but a logical continuation of the business. You will find that in M&A FIRM's approach, much time and energy is put into really feeling the lifeblood of your business in order to grasp its intrinsic value - in fact, the DNA of your organization. We want to hear your story, know your dreams and ambitions, so that together we can find the most optimal way to exit.
In those last 24 months before sale or acquisition, we help you set your goals, prepare your company for sale or purchase, and together increase the stability and future prospects of your company, before entering the mergers & acquisitions process. With its approach, M&A FIRM guides companies step by step through the preparation process in order to increase the success of the acquisition.
MERGE
Finding the right business partner to sell your business to, or to acquire a business from, is a delicate and time-consuming process. This stage in our advisory process consists of the "classic" M&A services: from finding the right candidate to closing the transaction. But we are not looking for quick profits, or for a particular candidate. On the contrary: we seek the candidate who can offer the best and most sustainable long-term success for the company.
Unlike other M&A advisors, and because of our multidisciplinary approach, we give you all the advice you need from a single source. This ensures that you can continue your daily business with as little disruption as possible. After all, as an entrepreneur you don't want to lose focus on your current business operations. But if your focus is on an acquisition, you will look differently at day-to-day decisions: "Should I move to a bigger building or not? Should I keep that remodel going if I want to sell? Should I hire new staff? Or hold off on that? What about that long-planned marketing campaign? Should I work on the weaknesses in my business now? Or just not anymore?
The team at M&A FIRM will help you do just that. From the beginning, our team will consist of a dealmaker, a financial specialist and a lawyer. Depending on the specifics, we can also add ESG and sustainability specialists, business developers, marketing and communication professionals and salary specialists to the team. Of course, at all times in consultation with you.
INTEGRATE
Many business acquisitions fail due to poor communication during the transition, resulting in poor integration.
Our advice therefore does not stop at the closing date, but in our approach continues for as long as necessary to ensure a sustainable transfer of the business to the new owner. Whether on the sell-side as part of earn-out obligations or on the buy-side to enable a smooth transition and integration. This usually takes about 6 to 12 months.
Learn more about M&A FIRM's approach.
Do you have questions after reading this article? Could you use some advice, or are you considering a (form of) business sale? Feel free to contact us, we are happy to help you.
