Adding Value to Acquisition Process: A Guide For Chemical M&A Advisors

Mergers and Acquisitions (M&A) are the hottest trend in the chemical industry market, and for good reason. They help consolidation and in eliminating non-core elements in a way that can boost a company’s product and client pool, while also leveling the playing field. A combination of a great legal team, business strategy, and confluence of work philosophy are what help create the perfect merger. Here’s how to make sure you get the right deal, instead of being stuck with a deal that runs major losses.

The Due Diligence

This is your legal team’s main domain and where their strengths are to be fully utilized. While lawyers may not have the expertise on market strategy, they are the main players in negotiating the M&A process. The right contract can create life-or-death situation for your business, so ensuring the due diligence is done correctly by expert lawyers is key. Make sure you find a legal team that understands the business, the specifics of the escrow, and advises the company on the right insurance plan in case of failures.

Private Equity and Activist Investors

Given how competitive the business market is, it’s important to take into account the role PE and Activists play in the M&A process. Although they pose a threat to strategics, they are also a major source of funding that cannot be completely out-ruled. The correct M&A adviser will consider the pros and cons of a particular sponsorship deal before immediately saying no to an investor. While they are a competition, they are also a good exit strategy to liquidate assets and offload part of the business that are difficult to shed.

Chemical M&A Carve-Outs

Carving out assets and portfolio management is a huge part of M&A. Understanding the right carve-out strategy is crucial to a chemical M&A. It is important to understand that carve-outs are no longer just limited to offloading non-core businesses. A good M&A advisor will understand their importance in creating shareholder value, as long as the correct preparation is done when framing the sale plan.

Ultimately, the M&A game is one that will be played for a long time coming in the chemicals industry. Ensuring that you don’t lose it is all about finding the right team to help you – and the right advisory board can take all these factors into account to score you the deal your business deserves.

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