Welcome to this edition of M&A MAG, a magazine which focusses on the many aspects of business Mergers & Acquisitions.

In this edition:

• Article: Ready, Steady, Exit!
• New book: M&A THIS WAY!  Available here: https://mergeacq.com/ma-book/

Article:  Ready, Steady, Exit!

Merger and acquisition (M&A) deals are booming. For example, over the last year, Google acquired $32bn for Wiz and Palo Alto Networks acquired CyberArk for around $25bn.

The M&A pace seems to be picking up – why is this? Often, it’s about timing. Buying a successful business can be a short cut to building a business.

If a seller wants out and a buyer wants in, there could be a win-win situation.

However, M&A deals tend to be 10% economic, 10% tax, 10% legal, and 70% psychological. The “smell of the money” has an effect on people’s behavior in many deals.

So how does a selling company exit via an M&A deal at a fair price?

In other words, how much is the cake worth?

We briefly discuss below some of the factors for buyers and sellers to check out before any M&A/exit deal.

M&A Process:

There are a number of stages for all sides including the following. Preparing objectives, reasons, information, advisors and the business itself. Identify candidates. Auction, woo and negotiate. Letter of Intent. Due diligence review. The seller will check the buyer has finance in place. Execute the deal. Post deal integration.

What Type Of Deal Do You Want?

There are many ways to cut the deal. Do you want a share sale?  An asset purchase?  A management buyout by existing management? A management buy-in by a new hungry but experienced team? Or a just an exclusive license or supply contract. Much will depend on tax, who is the stronger party and the overall circumstances – see below.

What Are The Seller’s Motives For Selling?

The seller will have a reasonable answer to this question. Opportunity to make a capital gain? Realize opportunities? Forced to sell – bankruptcy, death or sickness? Retiring? Increased regulation? Increased competition or failing business? If the latter – is there a turnaround opportunity or an asset opportunity for the buyer?

What Are The Buyer’s Motives For Buying?

The buyer typically wants access to a new product or new technology. But not always. Other reasons for buying include access to new customers or sector, economies of scale, market dominance, turnaround opportunity, asset opportunity. But the buyer must do due diligence and be careful not to over-spend. It is also vital for the buyer to plan “the morning after”.

What Are The Main Methods Of Sale?

Methods of sale include a trade sale, financial sale, auction, IPO, exclusive license or supply, buy-out, buy-in.

Valuing A Business:

A business is worth what another party will pay for it, no more, no less. Possible
bases for negotiation include:

• Multiple of past or future expected profits
• Asset based valuation
• Many others e.g. market share, key technology, brand value.

Questions To Ask When Preparing Include:

• In the case of a start-up, does the product work yet??
• Is intellectual property (IP) protected?
• Is the business in good shape?
• How is the cash flow?
• Are personnel incentivized?
• Are management performing well?
• What will the main negotiation issues be – price and what else?
• Are the founders prepared to stay on to help ensure a smooth handover?
• What should the post-acquisition business model be?

Have Your Business Plan Ready:

As Paul Simon sang, “Get a New Plan, Stan!” (50 Ways to Leave Your Lover).

Both sides need a business plan. Set goals. Have a strategy and time-table for achieving the goals. Share relevant parts with employees.

Predicting the future is difficult. What matters, in particular, are the assumptions made.

What about the Tax Side?

Sellers usually prefer a share sale. That way shareholders may pay limited capital gains tax but this needs checking in each country concerned.

Employees on a stock option plan also want to minimize their income tax/capital gains tax/social security liability. And they are afraid they may be let go.

But the buyers typically prefer to buy the main assets – which can increase the overall tax liability considerable for the sellers..

Sometimes buyers, especially those listed on a stock exchange, pay with their own stock (shares), not cash.

International M&A deals present additional considerations. Detailed rules exist and advance planning is absolutely essential for both sides.

Moreover, the buyer must sometimes withhold tax.

The transaction agreement will need to reflect all these tax aspects among many others.

Additional Aspects;
The above is a short general article, many more factors matter. Please email: [email protected] for M&A advice and assistance.

Book: “M&A THIS WAY !”

The above article is taken from:  “M&A This Way!”  

This is a practical guide book for purchasers, sellers, advisors and investors on many aspects of M&A deals.

Discover what to expect in M&A deals of all sizes, including international M&A deals.

Topics covered include:

• Ingredients of an M&A deal
• M&A motives and negotiation strategy
• M&A process and preparation
• Structuring an M&A deal
• Valuation aspects

Author: Leon Harris of HCAT Harris Consulting & Tax Ltd, accounting & international tax specialists.

Packed with practical tips. Based on experience of many M&A deals in many sectors.

© January 2026 edition. 

Price: USD 50

“M&A This Way!” is available as an immediate PDF download. Please click here: https://mergeacq.com/ma-book/.

Footnote:

As always, consult experienced legal and tax advisors in each country at an early stage in specific cases. We can help arrange this.