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Whether you have already merged with or acquired another company, this guide aims to inform you on the various benefits you can expect to receive afterwards. Keep reading to find out the top benefits of mergers and acquisitions. 

Explaining the Terms

Before we can discuss the benefits, we need to clearly define both mergers and acquisitions. A merger is when two companies of relatively similar size decide to join forces to form a separate entity or co-branded company. An acquisition on the other hand is when one company buys another and folds it into their existing business. The key difference is that in most mergers both companies retain their rights and work together towards common goals. In an acquisition, one company will take the reins and make decisions about what happens with the company being acquired. 

Rewarding Returns

Using mergers and acquisitions, you gain the option of selling a portion of the business to a private equity firm. A private equity firm can buy the entirety of the business, giving you a significant amount of cash you can use to either retire or focus on other interests. Mergers and acquisitions allow you to potentially enhance the price you receive for your company. The timing and planning of the sale is the most important piece of this option. With the right timing and planning you can actually negotiate higher valuations than previously negotiated, which allows you to get even more money out of the sale.

You also have the option of selling a portion of the business to a private equity firm. If you choose to sell enough such that you are no longer majority owner, the options increase even further. You can choose to keep investing in the company, remain involved in company operations and planning, and work with the new majority owner to generate increased value. Through this set of steps you can accrue generational wealth that will support your family for years. Once you are satisfied with the state of the company, you can sell your remaining stake, hopefully for more than it was worth years ago. 

Scaling

Scaling a business to meet demand is integral to achieving years of additional success. Mergers and acquisitions can give you access to resources that would usually take much longer to acquire. Things like talent, material assets, bigger client bases, etc. are all much more accessible through mergers and acquisitions compared to scaling internally. One of the biggest advantages that come with mergers and acquisitions is the addition of extra capital. You can use this capital to get more employees, find more customers, anything you think will help the business grow. Simply put, you can get more autonomy and opportunity through a well timed and planned merger or acquisition. 

We’re Here to Help!

Looking to become a business owner in 2022? At Murphy Business, we understand how overwhelming and complicated buying or selling a business can seem. Finding the right business to buy or the right buyer to sell to is a lot of work. That’s where we come in. Our experienced team will help you find the right buyer for your business or the right business for your buck! 

Contact us for more information and connect with an expert today!