What are the key features of a good corporate M&A process

This topic contains 5 replies, has 6 voices, and was last updated by  Krishnan Bangarusamy 6 months, 1 week ago.

Viewing 6 posts - 1 through 6 (of 6 total)
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  • #64623

    Qiyang Liang
    Participant

    A corporate M&A may involve a wide range of target companies such as startup, matured companies, distressed assets etc.
    What are the key features of a good and flexible/dynamic M&A process?

    this topic partly arise from the Polycom case study

    #64833

    Marina Manakova
    Participant

    I’m afraid there is nothing like “key features” of a good and flexible/dynamic M&A process. It’s all the matter of Top-management attitude and Execution Team. Partly this is the reason of so many unsucessful M&A deals.

    #65644

    Carli Luhrs
    Participant

    A good M&A process- is Key. Follow the process and have the right key people on your PMO team to be flexible, when needed. It takes almost as long to choose the right PMO and functional teams as it does the M&A process.

    I think the first step is to develop an acquisition strategy, then identify potential target companies (profit margin, location, culture adoption, customer base), search for target companies, begin acquisition planning, start valuation analytics, complete negotiations LOI agreement, begin the due diligence process, purchase and sale contracts, begin the finance strategy, and then close the acquisition, lastly begin post-merger integration process Day 1 -Day 100.

    And communicate the process, where you stand in the steps- to employees to keep momentum and trust within this change management phase.

    #65695

    René Geltink
    Participant

    It requires knowledgeable people to define the best strategy for every case. For example dealing with a startup is quite different from dealing with matured companies. A startup might need external advisors during the M&A process and during Post Merger Integration, a consideration is to keep them on ‘arms length’ to maintain their startup mentality and not destroy value

    #109496

    Paul Gray, MBA
    Participant

    The process should first begin with a clearly defined objective, which helps to guide the rest of the activities. In other words the objective criteria helps to create filters in the target identification aspect of the M&A process. Next would be to determine if you will use advisors or internal resource or a business broker to help filter and identify targets. Each has their pros and cons but the key will be the level and quality of due diligence to ensure that only qualifying targets are assessed. Once you have aligned on a target then a “Deal Team” would need to be assembled to conduct robust enhanced due diligence and confirmatory due diligence and once the acquisition is confirmed a go integration planning should ideally commence.

    For startups the aforementioned approach would probably involve only the management team and a 1 or 2 advisors given the lack of history in the target. Acquisition of start-ups may be for the talent acquisition or patent or new strategic business line. In all cases, it will require the same general path only with greater scale based on the complexity and required skill sets to conduct the diligence and integration activities.

    #109506

    Total second Paul’s viewpoints above… But just to add, each M&A may demand a very unique approach. It is contingent on various factors and parameters.
    Importantly, it is aligned with the purpose and outcome of the initiative.

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