4 Simple Ways to Supercharge your M&A Process

1.Know your Objectives & Develop a Plan

It’s stating the obvious, but before you start searching for potential targets, it's important to define what exactly  you're trying to achieve with an acquisition. What are your goals? What does this acquisition need to do for your business? This is the starting block for any M&A programme and yet it’s alarming just how many companies don’t give this topic enough thought. 

Research conducted by McKinsey suggests that successful acquisitions align closely with an organisation’s long-term growth strategy. Organisations that demonstrate an ability to accelerate revenue growth via acquisitions typically, do not treat deals as opportunistic “events” or as something that just “happens” to a company. Rather, they regard M&A as a core capability, essential for creating value – and develop a plan.

Begin developing your M&A plan and approach by asking some pointed questions. Do NOT accept simple, jargon-filled answers. Gain alignment with senior management on the answers:

1. Why, where and how should we use M&A to help achieve the corporate strategy?
2. What is our value creation “mechanism” – in detail? How does this link to increasing shareholder value?
3. What are the specific desired strategic outcomes of M&A? 
4. How does the target make us better? What specific capabilities will it affect? Will it add new capabilities? Enhance existing ones? Increase scale?
5. How can we make the target better?

2.Create a Timeline & Checklist to Track Each Step of the M&A Process

To ensure that each step of the M&A process is completed correctly and in a timely manner, it’s important to create a detailed timeline and checklist. A checklist should cover key phases of the deal-lifecycle including due diligence, operating model design, integration planning and the integration process itself. By keeping track of each step in the M&A process, you can avoid missing critical deadlines and maximise the odds of a smooth transaction for all involved. Additionally, M&A checklists can be used as a reference point for future transactions. By taking the time to create a timeline and checklist, you can save yourself many headaches down the road. A word of caution, however - transactions don't alway go to plan and you will inevitably be taken off-piste. While a checklist can help set the course of a transaction it will never be a substitute for the experience that comes with being in the midst of a deal.  

Don’t have a Due Diligence or Integration checklist? Download the Navima M&A Due Diligence Checklist and M&A Post-Merger Integration Checklist

3.Conduct Regular Team Meetings to Discuss Progress & Issues

As any good leader knows, communication is key to maintaining a strong team and ensuring the momentum of a transaction. By holding regular team meetings (carving out a set day and time each week is a good start) you can ensure that everyone is on the same page and that issues (including potential deal breakers) are addressed in a timely manner. This also provides an opportunity for team members to share their ideas and give general feedback on the transaction in a proactive - rather than reactive - manner. Additionally, regular meetings (if conducted correctly!) can help give team members "a voice", build morale and boost motivation. 

However, ensuring that all involved parties in an M&A deal are aligned in the proper way can be a major challenge. Individuals must understand and agree to activities, objectives, priorities and commitments. It’s especially important to manage the “silos” created by smaller groups focused on a single area or issue. Teams (and functional workstreams) should, of course, be focussed, but cross-team communication is critical to keep all the parts working in concert.

Successful alignment ensures:

• Common understanding and access to information.
• Incentives that drive action and reinforce accountability for critical tasks.
• Engagement with and input from those responsible for both pre- and post-deal activity.

Rather than specific one-time activities, team alignment requires ongoing management across the M&A lifecycle. Points to consider include: 

• Provide as much information to team members as possible;
• Ensure team members receive the support needed. Intervene quickly in case of blockers;
• Meet regularly to review progress. Limit meeting attendance to a small management group spanning all workstreams;
• Assemble everyone involved prior to kicking off an M&A project. Introduce the teams, review deal rationale and proposed benefits and explain the pre-close process;
• Run regular meetings beginning pre-close to share due diligence findings, deal issues and emerging ideas about integration;
• Ensure sufficient overlap between due diligence experts and individuals responsible for integration design and planning;
• Develop formal, documented methods to share information between workstreams. Manage version control tightly;
• Ensure that all participating in due diligence understand not only what information they will gather, but why that information is important. This will help them to be more efficient and focuses. And, more successful.

4.Use Software to Streamline the Deal Lifecycle

M&A software can be used to streamline the deal lifecycle – it’s designed to help manage the entire M&A process end-to-end and makes teams more productive in the process. M&A provides a central repository for all transaction information, including documents, playbooks, reports and task lists. Benefits include:

• Automates the tedious and time-consuming tasks such as creating reports.
• Provides instant access to the latest information, documents and data.
• Helps manage and track progress on multiple deals simultaneously.
• Ensures that M&A projects are completed on time and on budget.
• Provides real-time updates so you can always be sure you're on track.

If you want to close deals faster and be more productive in your role as an M&A professional, then now is the time to consider M&A software. It will automate tedious tasks such as creating reports, provide instant access to key information, help you track progress on multiple deals, consolidate all your data and provide real-time updates. All of this adds up to one thing: a more efficient and effective way to get the job done.

Takeaway

Implementing a successful M&A process takes time, effort and careful coordination between all involved. However, by following these simple tips, you can supercharge your process and ensure everyone is on the same page:

• Before looking for potential targets, define what you want to achieve with the acquisition and ensure that it aligns closely with the company’s long-term growth strategy.
• Develop a timeline and checklists for the M&A process, including key phases such as due diligence and integration. This will help avoid missing critical deadlines.
• Hold regular team meetings with everyone involved - be proactive, not reactive. Share information and address issues in a timely manner. 
• Use M&A software to help organise everything into one central repository.
  

Ready to supercharge your M&A process? Schedule a demo today with one of our experts to see how we can help improve your M&A process.

About the Author

Tom is the CEO of Navima. Prior to Navima, Tom worked at 2 M&A boutiques (leading acquisitions, divestments, strategy and venture projects) and was Head of M&A & Corporate Development for a fast-growth, VC backed SaaS company. Tom has supported companies around the world including Shell, Unilever, Philips and the Big Four with improving their M&A process and leading the development of playbooks.