August 13, 2018 at 12:52 pm #65691
Does it make sense to have a dedicated team representing all functions / business areas for both the M&A process itself as the post merger integration. Objective would be to build knowledge on how to best execute on this for the best results.August 15, 2018 at 12:17 am #65799
My preferred approach is to have a corporate development team that handles all 3 elements – strategy, M&A process and PMI process
First, it’s challenging to do M&A without having a clear idea regarding the strategy
Second, it’s challenging to do M&A properly without having experience in PMI – most deal people do not have strong operational know-how and this is a way for the deal team to understand operation difficulties which they can then start to consider at deal stage
Thirdly, it’s hard to lead PMI without the prior knowledge of the company that will be gained during the deal process. learning from each PMI execution will strengthen the deal team’s overall capability and the chances of higher M&A successSeptember 7, 2018 at 11:49 am #67350
Agreed that learning from the process of past deals is essential to M&A team.
It is generally thought that a dedicated M&A team of experienced professional of the right character would make a deal smarter. A right and experienced team in place could make better judgements and maintain best practice at various stage of the M&A process such as screening target, conducting due diligence and participating in PMI. However, when the target is located in an unfamiliar industry or jurisdiction, M&A team is better work with local advisers or consultants. That is also great for learning from them.September 15, 2018 at 6:59 am #67666
i always been doing M&A work, but more from a SME, where resources and manpower are limited and constraint. It will be good to have a dedicated team. but given the sensistivity of the deal, and confidentiality is also important. I feel that a closely knitted group of advisers working on it, is enough. All it takes is one gossip talk and the share price goes volatile and before long, other rivals will start pounching in as well.September 27, 2018 at 5:00 pm #68248
from my perspective, it makes definitiv sense to have a dedicated team for searching, rating and acquiring companies. If you acquire a higher amount, you are better hiring the right staff than paying external consultants. This grants the best fit and rating because of the insights of your numbers and philosophies.
For PMI it’s at least the same – your own team is even more interested in results.November 2, 2018 at 8:02 pm #70851
A dedicated team has the advantage of having a clear understanding of their corporation’s M&A goals and how their many acquisitions build upon the desired strategy. That being said, sometimes “tunnel-vision” issues can arise when a company is focused on a goal and isn’t able to see other threats or opportunities. To help avoid these issues adding outside counsel can bring a fresh pair of eyes to a deal, even more so when hired to provide analysis on why the deal isn’t in the company’s best interest.December 9, 2018 at 3:41 pm #73150
A dedicated team is a must for companies who plan to grow through M&A. My company has a team called transition specialists who assist with pre-merger due diligence, merger activity and PMI. Having a team that is not only the subject matter experts but also a single point of contact for all stakeholders engaging in the activity helps reduce friction and uncertainty for both the acquirer and the target. A failed merger or acquisition could be a devastating financial impact to the acquiring company. A dedicated team is a legitimate insurance policy for such an event.December 10, 2018 at 5:02 pm #73234
Marcelo Lopes AbudParticipant
Here is my thoughts about
A well defined team to handle within all M&A process of a company it
s a good strategy, but i dont agree with a 100% dedicated team, because that would takeoff the overview behind operational process and market moment that influenciates decision making about M&A.
For me those teams should be compound with directors and managers, and they should be encoraged to make a well defined analysis process, that drives all M&A analysis.January 3, 2019 at 9:49 pm #74702
Absolutely. Representation from every function including back office is critical. A dedicated team that can work closely together to align all efforts and ensure a seamless integration. This team of functional leads would complete the due diligence, identify any red flags, develop an integration plan for their respective function and oversee the timely integration post close. Companies whose functions work in silos will struggle during integration as many times, proper planning requires that all functions are aligned from the due diligence phase.January 10, 2019 at 10:41 am #75351
Cesar Otero LucasParticipant
Based on my experience, both teams are different. When we talk about M&A team, it makes sense to have an specific team if the company is growing by several M&A processes, because that team will guarantee that all the M&A operations are coherent with the global strategy. Besides, it is essential not to loose the global vision, and how each M&A process will affect the other ones. PMI team is a different thing. It depends on the situation the new company has before the acquisition, for instance, and the efforts must be led towards the needs. For example, it is different to integrate a family business than a multinational one, and PMI teams could be different in each case. Of course a steering committee is needed to ensure that all teams are running on time and according to the standards of the Company.March 24, 2019 at 5:12 pm #81858
Yes they should! and here is why: You have a business that runs day to day, they are usually called the “operations” or “operators”. For obvious reasons, with out them, there is no sole business. You don’t want them to take away there focus on running the business day to day and focus on an acquisitions when they become present. Now if you have a dedicated Pre and Post M&A Team, that would not take away from the operators running the day to day business. A pre M&A team finds the acquisitions, filters them, and convince the operators on why the should acquire this business. There sole focus is just acquisitions. While the post M&A Team make sure the newly acquired business is trained and integrated with out bothering the operators.March 26, 2019 at 1:06 pm #81978
Certainly yes.When the M&A activity is important and the company is constatntly evaluating and deciding on various deals it should have a team fo few people that will be in charge of spotting targets, evaluating them and most of all be trained on this process, from the valuation techniques to teh due dilligence, execution at a certain level and post deal evaluation.
To me the techncal training requires time and on the job application that needs time, therefore having a dedicated team makes really sense in large companies.March 29, 2019 at 3:52 am #82114
I believe it is sensible to have a dedicated team dealing with the M&A process and post-merger integration. Having a team comprising of all relevant functions/ business areas collaborating allows for a more thorough and less siloed approach to the M&A process. Information from the M&A process will influence PMI strategy. Similarly PMI strategy and concerns is a vital consideration in the due diligence process – if integration would be challenging or costly is the deal a good idea? Probably not.September 3, 2019 at 8:27 am #94029
If M&A’s activity is so important and happens quite often, it means that there is a constant wave of activities happening ie strategic assumptions, investigation in the market, identification of potential targets, study of the numbers for the selected one, running of the models for valuation, synergies etc, proposal to the BOD and then execution with all the phases that we know.
If there is a team in place, that builds experience and know how which is an absolut must for any sucessfull M&A activity while in parallel allows many interested employees and executives to join the team and build capacity for the future.
More experienced persons can then lead PMI activity which is a very important part of the activity.September 10, 2019 at 2:05 pm #94680
If a company is acquisitive and is involved in a number of M&A’s, then it should certainly have a dedicated team for the pre and post processes. An acquisitive company will have specific methods and ways of carrying out its M&A processes and depending on the industry in which the acquisitive company operates, it will have specific areas of focus when evaluating a target or conducting a due diligence or when implementing the transaction post-closing. Having a dedicated team who gains institutional knowledge, not only on your preferred processes and areas of focus, but also on the industry in which the entity operates, will make for a more efficient M&A process, pre and post.
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