November 13, 2015

Calculating costs of a tech merger or acquisition

Consider these key elements before proceeding with a merger or acquisition.

Many tech companies across the industry are joining forces and acquiring their competitors in an effort to gain more business success and marketplace recognition. For tech companies, unlike other business sectors, much of their values are closely associated with intellectual property (IP), which has to be thoroughly reviewed to ensure that it is worth investing in, according to TNW News.

Calculating exact costs of what is involved in the process can be daunting, yet vitally important to its success. Though it is difficult to ascertain exact costs associated with certain deals beforehand, with the help of an expert M&A advisor and considering a few key elements, these can be calculated much more easily and accurately.

To gain the most from your merger or acquisition, guess approximately how long you believe the process will take and then add more time. Also, don't overestimate the value of a particular company or service and be firm in the absolute highest price your company can afford to pay.

Furthermore, self-reflection is necessary before any potential merger or acquisition. Why are you proceeding with this particular business strategy? What do you hope to gain as a result?

"Knowing this will also help with your decision-making process. Sometimes, a company will buy a competitor to increase market share," TechRepublic writes. "Other times, the acquired company adds a new desired business capability. Understanding the motivation will help you decide what is important versus what isn't."

With the help of an M&A advisor, your tech firm can find, negotiate and sign a merger or acquisition deal meet meets the needs of your growing company. Contact us today to learn more about how working with an advisor can help your company reach your next level of success.