Considerations for Merger & Acquisition Offers

What to Consider Before You Agree a Deal: Business Merger

By Aoife McGinley, Head of Client Services, Bibby Financial Services

Thinking about a business merger? Discover the key financial considerations, from valuation and funding to integration costs and cash flow.

When an unexpected offer to merge your business or sell it outright arrives, it can feel both flattering and unsettling especially if it comes ahead of your own timeline. For many business owners, it’s not just a commercial opportunity but an emotional turning point.

From our experience funding SMEs through these transitions, we know that offers often raise one big question: what do I need to consider before agreeing to a business merger or sale?

This perspective was recently featured in Business Post, highlighting the critical steps owners should weigh before making such a significant decision.

Mergers Are More Common Than You Might Think

According to Bibby Financial Services’ SME Confidence Tracker (2025), over one-third (34%) of Irish businesses plan to explore a business merger or acquisition this year, with a further 14% considering a full sale. In the Irish food and drink sector, such offers are increasingly common as companies look to:

• Expand portfolios
• Reduce competition
• Increase market share
• Achieve economies of scale

For many business leaders, joining a larger group can bring advantages such as stronger purchasing power, wider distribution channels, and more investment in innovation, benefits that might be harder to achieve independently.

Clarify Your Goals Before Entering Talks

The SMEs we work with start this journey of being clear on your own motivations and priorities:

• Are you looking for a complete exit?
• Would you prefer a phased transition?
• Do you want to stay involved in an advisory capacity or reinvest in the merged entity?

This clarity will help shape your expectations and influence the funding structure you may need.

Understand the Buyer’s Intent, Not just the Price Tag

Looking only at the headline figure can be misleading. Consider:

• What will happen to your brand, will it continue or be absorbed?
• Will your team’s jobs be secure and the culture protected?
• Will your customers experience continuity or disruption?

From a funding perspective, it’s also worth thinking about whether the buyer will invest in growth or take a cost-cutting approach that could affect future revenues.

Get an Independent Valuation

We always encourage SMEs to seek independent professional advice for valuation, never rely solely on the buyer’s figure. A professional can help:

• Apply multiple valuation methods
• Identify hidden value in your assets or contracts
• Highlight working capital adjustments that could affect your final proceeds

Consider the Deal Structure and Tax Impact

How the deal is structured can affect your cash flow, risk, and net return:

• Straight cash sale: Immediate payout, but potentially higher tax
• Earn-out: Payment tied to future performance, requiring ongoing involvement
• Equity in the acquiring company: Long-term upside but less liquidity

Tax consequences vary, so professional advice is essential to understand your position.

Factor in the True Cost of a Business Merger

From the SMEs we fund, common one-off costs include:

• Legal and advisory fees
• IT and systems integration
• Rebranding
• Redundancy or relocation costs
• Meeting change-of-control obligations in contracts

These can easily amount to 5–10% of deal value, so factoring them into your funding needs early on is vital.

Prepare for Cash Flow Changes After Completion

Post-merger, many SMEs experience higher working capital needs due to:

• Larger inventory requirements
• Extended customer payment terms
• Supplier renegotiations

Funding solutions such as invoice finance, asset finance, or in some cases a joint funding arrangement with a partner like PTSB can help bridge these gaps.

Take Your Time, Deals Take Longer Now

Even if the offer comes early, don’t rush. Many SMEs report that deals now take up to a year to complete due to increased due diligence covering financial, legal, commercial, IT, HR, and ESG factors. Use the time to review your options, secure funding lines, and assess the buyer carefully.

How Bibby Financial Services Can Support You

At Bibby Financial Services, our role is to provide flexible funding that supports SMEs through mergers, acquisitions, and other significant transitions. We don’t advise on the legal or tax side of M&A but we do understand, from the SMEs we’ve funded, the financial pressures and opportunities these deals can bring.

Whether it’s bridging working capital gaps during integration or collaborating with partners like PTSB for acquisition funding, our goal is to ensure you have the resources you need at the right time.

Final Thought

A business merger can be the start of an exciting new chapter for you and your business. With clear goals, professional advice, and the right funding support, you can make decisions that protect your interests and position you for long-term success.

If you are considering a merger or acquisition, talk to us on (01) 297 4911 about funding your plans.