While mergers and acquisitions (M&A) may sound like corporate buzzwords, they can have significant impact on the growth strategy of a business, its survival, and the success. M&As are often pursued for strategic or financial reasons, and may take various forms. A company may want to explore new markets or obtain expertise and intellectual property, or enter the healthcare sector. In other cases the company may face the requirement to replace retiring Baby Boomers with more skilled and experienced team members.
The majority of private M&A deals are structured to be acquisitions of assets rather than shares. Stock Purchase Agreements, Securities Purchase Agreements or SPA are the most well-known names used for the main agreement that governs these transactions. This article will look at some of the main elements of these agreements.
A solid understanding of M&As is essential for any leader looking to expand their business via acquisitions. Check out our courses in the Leading with Finance portfolio to build your toolkit to make more informed financial decisions. The earlier you begin to think about the financial implications of M&As, better prepared you will be to avoid common errors. M&As are complicated, time-consuming and difficult to execute. A well-planned M&A however, could generate tremendous value for your business when you have the right strategy.