Similar to any major production, the M&A process requires that the right people are in the right places, and at the right time. Veteran deal makers understand that involving the right stakeholders at the proper time can have a significant impact on the M&A process, and possibly the ultimate value of the deal. For small and medium businesses who don’t regularly engage in merger and acquisitions activity and figuring out who should do what and when can become overwhelming. However, it’s essential to get this part of the process right from the beginning.
Five Merger & Acquisitions Stakeholders Groups
- Business unit leadership
- Transaction lead
- Corporate development
- External advisors
Before engaging in any M&A activity, it’s essential to know who sits in the above groups.
The CEO and other c-suite executives will collectively make up the Investment Committee (IC). The IC is the ultimate decision-makers and retains responsibility for the success or lack thereof for every transaction.
The IC is responsible for ensuring that the right people are in the right seats in the other groups. They assist the various groups in maintaining focus and discipline throughout the process. The M&A deal process quickly gets messy if someone doesn’t help the aligned teams. The IC is the force which encourages teamwork and focuses on the objective.
The Business Unit Leadership
Once a transaction is complete, the newly acquired entity will be operating within the buyer’s organization. The majority of the time, this takes the form of working under an existing unit. The business unit team should be involved early in the process to provide strategic guidance. This includes when it will be time to pursue M&A activity and when to hold off.
The Corporate Development Team
The corporate development team is involved in the merger & acquisitions process from the beginning. For several acquires, a dedicated team may exist with the sole task of completing deals. For smaller entities, the corporate development team may be assembled when needed and disbanded once the deal is complete.
The Transaction Lead
If you’re are pursuing a transaction with the hopes of realizing such synergies, then be sure your transaction lead is involved in the process. The lead’s job is to help finalize the deal and facilitate integration. If you think your deal ends when documents are signed, and a wire is sent, then think again. The integration process can make or break the synergies that caused you to pursue the deal in the first place.
The External Advisors
You and your company are likely very talented, but most likely, you won’t have all the answers during the M&A process. Your outside advisors such as CPA’s, lawyers, and other deal makers may be able to provide valuable insight. It’s crucial that you seek out their assistance to make sure you’re going down the right path. Ask your advisors early on and throughout the process. They can help you to identify red flags, pitfalls, and good opportunities.
Running a proper M&A deal process requires discipline and having the right people in the appropriate seats. If you’re are new to the world of merger &acquisitions, learn as much as you can from successful deal makers. For smaller companies going down the path for the first time, it’s essential not to overlook specific parts of the process or make false assumptions. Build a quality team, seek outside advise, and be sure to learn from your experiences.