Chapter 1
The Building Blocks of Mergers and Acquisitions
IN THIS CHAPTER
Becoming familiar with the main vocabulary of mergers and acquisitions
Understanding the rules of the road
Opening your eyes to potential costs
Figuring out where your company fits
Mergers and acquisitions is a complicated field, so this chapter provides a basic overview: an introduction to the basic terms and phrases, a discussion of decorum and the basic M&A process, a look at the players and the category of deals, and my handy-dandy guide to helping business owners determine what kind of businesses they have.
Defining Mergers and Acquisitions
Mergers and acquisitions (or M&A for short — the M&A world is rife with acronyms and initialisms) is a bit of a catchall phrase. For all intents and purposes, M&A simply means the buying and selling of companies. When you think about it, mergers and acquisitions aren’t different; they’re simply variations on the same theme.
In the strictest sense, a merger is a combination of two or more entities where each merging entity has an equal stake in the new enterprise ...
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