M&A allows businesses to expand the most successful video conferencing companies their geographical reach and gain an edge over competitors, and gain access to new technologies, employees, or assets. M&A can be a long and demanding process. The process can take months of evaluating potential companies by conducting formal due diligence that involves the deepest dive into the company’s data – commercial, financial and operational. This process is more challenging when a business is located in another country, as many of the same steps are needed to succeed, but with additional challenges around communication and collaboration.
Preparing for Day One
When a company gets acquired, the initial day of operation (known in M&A terminology as „Day 1“) must be prepared. This includes establishing company structures, merging back-office infrastructure and IT systems, as well as telling employees what the plan is for how things will be conducted in the future. The M&A team must also ensure that all important documents are accessible, including legal contracts, agreements, and financial models.
Building a shared vision
A successful M&A strategy requires a clear understanding of the differences and similarities between the two parties in terms of business goals and culture. This is especially crucial when businesses are buying or merging from a distance. A new organization without an understanding of its goals can lose its direction, and cause a rift at work.
M&A is a risky process that can have unintended consequences. In particular the sunk-cost fallacy can force M&A decision-makers into agreement traps, where they agree to an agreement that is more costly than the best alternative.