There are principally two types of mergers: one is an acquisition where the acquired company is merged into the existing operation, and the second is a true merger where two companies merge together and the two previous owners become the new owners of the merged entity. The true merger is discussed in further detail below.

Owners seek to merge companies for several reasons including: combining breakeven or profitable companies to become profitable or more profitable, combining competitors for succession planning or combining for synergistic reasons.

The merging of two companies together can be extremely profitable and rewarding; however, there are many important factors to consider. The single most important factor is the compatibility of the two owners. Since it is not possible for a company to have two leaders, they must agree on what roles each will have going forward. Mergers work best when owners possess different areas of expertise such as sales, production, administration or a special skill required by the company.

Amvest manages true mergers from the initial discussions to the successful combination:

• Discussions with the owners to determine compatibility
• Conducting a feasibility study of the two companies
• Proposing an executive structure and creating an organizational chart
• Valuing each company separately and discussing ownership goals
• Proposing methods of achieving ownership goals
• Analyzing the utilization of existing facilities and equipment and suggesting methods to dispose of excess equipment, redundant departments and excess personnel
• Analyzing the management of equity and debt
• Preparing and implementing a merger plan with the owners and coordinating merger activities with attorneys, accountants and other professionals