The issue of profitability of mergers and acquisitions has been in the focus of attention of the scientific and business community
M&A Transactions Management as an Integral Part of the Investment Process
The difficulties in forecasting import integration are most likely associated with the following circumstances. Foreign companies are the initiators of M&A in import integration transactions. Their motivation, implementation of the integration strategy in the Russian market of corporate control is influenced by various factors of the external environment: the specifics of the business cycle and the institutional environment in their national economy, the impact of globalization, and world trends on it, etc. The above factors differ significantly for companies from different countries, causing the ambiguous behavior of integrator companies in the Russian M&A market and the problems of forecasting their activity in the next period.
M&A transactions management is an indicator reflecting the ability of stakeholders to obtain multiplier effects from a transaction in irrelevant businesses. Working in an industry in which key competencies are concentrated, a company inevitably influences the related industries that serve the business or invest in it. Thus, in mergers and acquisitions, it is necessary to understand what additional benefits the transaction and subsequent integration will create for stakeholders from related industries. When increasing the value for our stakeholders, it is necessary to take into account the associated increase in their value in related businesses.
Approaches to assessing the effectiveness of mergers are different from the approaches to acquisitions. The differences are determined by the absence in the first case of the division of the participating companies into its initiator and object. The merger assumes equal participation of the companies in the transaction. Taking this into account, it is advisable to assess its effectiveness on the basis of profitability indicators. Their priority is due to the nature of the merger: as a rule, none of the participating companies is considered an investment.
What Are the Integral Parts of the Investment Process Connected with M&A?
M&A transaction management software is a must for the investment process because after the interaction you can:
- use the results of the analysis of financial, accounting, statistical reporting, taking into account international standards for making management decisions;
- calculate the consequences for the company – the initiator of the transaction and other participants in the merger and acquisition;
- own methods of analysis and assessment of financial risks;
- have the skills to develop strategies and tactics for managing financial risks and company value in mergers and acquisitions in modern conditions;
- draw up regulatory and methodological documents for the implementation of prepared projects for M&A transactions.
Once a deal is completed, it is important to effectively integrate the business and company structures in order to reap the perceived benefits of the virtual data room providers. They help companies streamline and simplify corporate structures and internal procedures for integrated teams and provide corporate consulting services, including:
- analysis of corporate strategies and management structures;
- advising on changes in the organizational structure and legal form;
- negotiating, drafting internal corporate documents (for example, dividend policy in relation to shareholders and the company);
- provision of a full cycle of compliance services;
- monitoring user actions to identify incidents of saving and moving important information, for example, saving information to USB drives;
- liquidation: providing full legal support during liquidation and bankruptcy procedures, including suspension of activities.