If you are looking to expand your company, you may be looking into mergers and acquisition. These strategies focus on acquiring already established businesses to either expand into new markets or fill a product, resource or knowledge gap within the company. If you are considering company expansion, these are a few things you should know about these strategies.

People Drive M&As

Although companies typically do the purchasing, people drive the M&A process. For example, a CEO or vice president may review the company’s assets and capabilities and find that the company is missing something that will be vital in the future. For example, the company may be expanding into an international market and lack the knowledge necessary to gain a foothold, so a foreign company that already has a share of the market and understands how business works in that company may fill a gap so the acquiring company can compete effectively. The person who identified the gap will be the driving force for the M&A process.

The Process Is Unpredictable

Although you may have identified a current gap in your business, that gap may change within the next 12-18 months. In addition, you may be looking at entirely different metrics or markets within a year. Your priorities may have also changed. If the process is driven by someone other than the CEO of your company, this likelihood is even greater. If your company is being acquired, don’t jump before all the papers are signed and the money is transferred. Therefore, M&A processes are unpredictable.

What You Need Matters

Whether you are the acquiring company or the company being acquired, today’s M&A process allows for many different concessions. For example, if you are being acquired, you can write employee retention into your contract. You can also ask for vesting or revesting rights. If you are acquiring another company, you can ask that key people stay on for at least 2-3 years to help the transition and share their knowledge. You have a lot more rights and options than you may have had previously.

Focus on Financial Viability and Strategic Fit

Of course, your first task will be identifying the financial viability of a prospective acquisition. Once you successfully determine that the company is viable, you should also determine strategic fit. Although strategic fit may be the first consideration you had when you made your list of possible acquisitions, you should revisit this factor. For example, dig deeper into the corporate culture and the additional knowledge and experience will you gain.

Mergers and acquisition are great opportunities to move your business forward, but you should know as much as you can about the process and possible acquisitions prior to pursuing this strategy.