I have witnessed many different approaches to merger and acquisition deal making and I have to admit that from time to time I have seen what I would call the “John Wayne” approach: shoot first and ask questions later, where every meeting is a battle and every executive on the other side of the table is a foe to be beaten down with aggressive tactics in order that the John Wayne character may be seen as the victor.
The Art Of Finessing The Deal
Despite the existence of the John Wayne type personas, there are also the more shrewd executives who know that the real art of making a smart acquisition can be likened more to a dance than a battle and the tactics and strategy should not lend themselves to a scene from Sun Tzu The Art of War but would be better taken from the plot of the “Last Tango In Paris”.
The first step is ensuring that the two parties are a good fit. Miss-matches need to be qualified out at an early stage, “build”; personality and culture are both prime requisites. Qualify early and qualify hard. No point in wasting time dancing with the wrong potential “partner”.
Personalities & Ego’s
It is surprising how often it is not the strategic fit that is the problem but an issue regarding a clash of personalities or egos. This can be avoided if the process is managed correctly. Expectations need to be set for each stage of the process and the initial stages, in particular, when the buyer and seller first meet, need to be managed with some care. I find that some guidelines and yes, rules as well, help make these meetings more productive and positive overall. The first two meetings are a bit of a courtship, where careful meeting management is critical. My job, at this stage, is to ensure that both parties have the correct expectations and meet their pre-meeting objectives. These first few steps are understandably somewhat tentative as both potential partners get to know each other and get a “feel” for each other - Just like two new partners in a dance. This is definitely not the time for any John Wayne bravado. If the early stages are managed correctly and time is taken to ensure that both parties get to know each other, a strong foundation is laid down for faster progress later on in the procedure.
Recognising The Fit
If the buyer has a clear M&A strategy, then recognising and analysing the fit is a far easier and faster step. “The M&A Strategy” plan, (need I bang on about the importance of this?) is your blueprint. Creating a true M&A Strategy plan that has had input from all your decision makers (and has been read by them all), ensures that you will move with greater ease through the process, once you do engage in the “dance”, as much of your thinking will have been done up front, freeing you to focus more attention on your “steps” and the important personal inter-play that happens in any M&A transaction. The fit needs to be recognised clearly and quickly on both sides. Qualify early and get out if it’s not right, to avoid wasting the time of both parties. Otherwise, have confidence in your analysis and move forward, continually assessing.
Any new relationship will throw up challenges, especially in the early days. I don’t think I have been involved in any acquisition where, at some stage, one or both parties haven’t said, “I don’t think this deal is going to happen.” or where they have had serious doubts that the deal would close. By its very nature, M&A is challenging, convoluted and frustrating, involving many twists and turns. Determination and perseverance are needed from both parties. Not every step will be easy and some steps may need to be repeated - just like two dancers practising their movements.
Don’t Over Relax
Just like two dancers, with time and hard work, the two partners in the M&A dance will come closer and closer together and gradually begin to fall into step. However, don’t become too relaxed and lose form just because things are progressing well; you need to remain focussed and realise that the deal is not over until the music stops, the agreements have been signed and the integration is complete.
Dance Teachers Available In Your Area
For those executives in the Information Management, ECM, BPM, BPO sector that are considering taking up the dance as a buyer or seller, then Boss Equity have experienced executives throughout North America, Continental Europe, Asia-Pac and the UK who can assist you through the dance, to ensure that you find the “right” partner and you don’t become a failed M&A statistic.
Most important of all is that, whilst you go through the M&A steps, you must maintain your focus on your business. Boss Equity has “Dance Teachers” in your area who know your sector intimately; fifty per cent of organisations that get to the stage of due diligence still fail to complete. This is costly, time consuming and distracting for your business. Don’t become a statistic; let us guide you to the “right” partner and through the “right” steps.
Boss Equity is a Mergers & Acquisitions specialist for ‘smart growth’ or divestment for ECM, Information Management technologies & solutions sectors in Europe, North America & Asia-Pacific.
For further information or to be connected to a regional VP, contact Mark Davis