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As the inflation and recession fears have subsided by the end of 2024, a majority of large organizations are taking a more positive outlook, considering making acquisitions in the next three years.
Meanwhile, the practice of deal-making in the previous years has demonstrated that buyers feel more confident making an investment when a target company has well-managed corporate records.
In this article, we explore the role of entity management in mergers and acquisitions success and outline actionable strategies to address legal challenges during the M&A.
Entity management is the backbone of successful mergers and acquisitions. Organized corporate records and governance practices showcase a company’s compliance readiness and strengthen trust with stakeholders.
By having sound subsidiary management, businesses can successfully address legal challenges in the M&A process and gain a valuable edge by:
Despite their potential benefits, mergers and acquisitions are fraught with challenges. Studies reveal that 70-90% of M&A deals fail, with complications often arising in the earliest stages. Legal professionals play a critical role in addressing these issues, which include:
To overcome these challenges, organizations must adopt proactive strategies that focus on simplifying entity management processes. Here are five actionable approaches:
Centralized entity management ensures all corporate records are stored in one accessible location. This eliminates data silos, reduces search time, and improves deal readiness. Imagine a scenario where your legal team can pull up the exact document needed for due diligence in seconds—that’s the power of a single source of truth.
Replace manual processes with automation to handle regulatory filings, track compliance deadlines, and maintain consistent records. Automation saves time, minimizes errors, and allows your team to focus on high-value tasks that drive deals forward.
Ensure that all appointments and resignations are documented accurately. Errors in this area can lead to delays and increased professional fees during due diligence. Early attention to these details avoids costly remediation and keeps your deal on track.
Buyers must have confidence in the ownership relationships of a target’s entities. Clear, well-maintained records help eliminate concerns and build trust. Think of it as presenting a clean and organized portfolio—a surefire way to leave a lasting impression.
Invest in cutting-edge entity management software to enhance data integrity, automate workflows, and ensure subsidiaries remain in good standing. By embracing innovation, you not only streamline processes but also gain a competitive edge in deal-making.
In the face of legal challenges in the M&A process, effective entity management is pivotal in addressing compliance and governance requirements for mergers and acquisitions. Here are some must-have tools:
A cloud-based system ensures that all entity data is securely stored and easily accessible, enabling quicker due diligence and smoother deal execution. Imagine being able to retrieve a critical document from anywhere in the world at a moment’s notice.
Platforms like Athennian streamline workflows, automate compliance tasks, and maintain consistent records across jurisdictions. This eliminates inefficiencies, reduces errors, and ensures your team is always prepared.
AI-powered tools improve accuracy in summarizing and analyzing large datasets, reducing human error and accelerating decision-making. For example, AI can flag inconsistencies in ownership records or highlight potential compliance risks, giving your team valuable insights in real-time.
Well-organized corporate records are essential for M&A success, as they foster stakeholder trust, streamline due diligence, and improve deal outcomes. By addressing challenges like director appointments, ownership transparency, and compliance risks early on, organizations can eliminate hurdles that could derail negotiations.
To stay competitive, companies must embrace modern solutions such as centralized data platforms and entity management software. Tools like Athennian empower businesses to centralize records, automate processes, and ensure data integrity—key factors in successful mergers and acquisitions.
For more insights or to explore how Athennian can streamline your M&A processes, don't hesitate to contact the Athennian team to schedule a free demo.
Q: Why is entity management critical in M&A? A: Strong entity management ensures compliance, builds trust with stakeholders, and accelerates due diligence, ultimately leading to better deal outcomes.
Q: What are the risks of poor entity management in M&A? A: Poor entity management can lead to compliance issues, data gaps, higher professional fees, delayed deals, and lower valuations.
Q: How can technology improve M&A processes? A: Technology streamlines workflows, centralizes data, ensures compliance, and provides real-time insights, making M&A processes more efficient and effective.
Q: What is a single source of truth, and why is it important? A: A single source of truth consolidates all corporate data in one place, reducing errors, improving access, and enhancing deal-readiness.
Q: How does automation benefit M&A teams? A: Automation eliminates repetitive tasks, ensures data consistency, and allows legal teams to focus on strategic activities, saving time and reducing costs.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
