Working with a M&A consultant
- This topic has 12 replies, 13 voices, and was last updated 1 year, 1 month ago by
.
-
Posts
-
We just recently began the integration of a large acquisition. Our company has a well established process and playbook for integration. Ownership felt it necessary to bring in a consultant to manage such a large undertaking. Do any of you have experience working with an outside consultant? Were they helpful? Tell me about how you feel the process went.
I’ve experienced working with an outside consultant. I found them to be very helpful. In addition to getting assistance on the integration, I typically learn best practices from them. I see hiring consultants during an integration as a path to elevate the IMO’s collective knowledge in the process. To get the most from the experience of working with a consultant, it may be a good idea to get their thoughts on your integration methodology and inquire how they may do things differently. If you do uncover helpful nuggets of information during the process, be sure to document them in the integration playbook and share them with the broader IMO team.
I personally am an outside consultant myself and I’ve found my clients find us helpful to bring a 3rd party perspective that is not emotionally invested in the business. So many times my clients have done their processes the same way they’ve always done them and when M&A is in the mix, they get scared of the uncertain. I’ve found our role is to bring an external view and let them know it will all be okay going through the right process and methodology.
I would recommend hiring a professional advisor with prior M&A experience. External consultants bring in the industry best practices and are not emotionally biased to the decision making process during acquisition. Only disadvantage I can think of is that this will cost you a hefty fee.
I completely agree with all three opinions shared about working with outside consultants during the integration process of M&A. Hiring external consultants can be immensely beneficial as they bring a fresh perspective, industry best practices, and objectivity that is not influenced by emotional attachment to the business. They can help elevate the collective knowledge of the Integration Management Office (IMO) and contribute to the success of the integration. To maximize the benefits of working with consultants, it is advisable to engage in open communication, seeking their insights on the integration methodology and incorporating any valuable findings into the integration playbook for the broader IMO team’s benefit. While it is true that hiring professional advisors may come with a significant cost, the advantages they bring in terms of expertise and impartiality can outweigh the investment, leading to smoother and more successful M&A outcomes.
Working with outside consultants can be the best or the worst decision ever. Some things to think about that make it a better experience: 1. Engage in conversation with several firms, 2. Define what the important selection criteria for the best firm for your situation, 3. Have firms to pitch their approach and go out to see their past work or customers if you can, then rank them using your criteria, 4. Be careful with letting price or most senior person drive your decision, 5. Identify the role of the consultant (heavy project ownership or lighter ownership serving as a coach to direct and support an internal team as an example)
I am an outside consultant so maybe I’m biased. I do feel that outside consultants can be a great benefit. They are not emotionally entangled in either side of the merger/acquisition and should just be focused on helping to create the best possible entity out of the combined organizations. Outside consultants usually bring a wealth of knowledge from past projects that prevent some big mistakes. It is important that the outside consultant listens well to the internal people and have a strong background in change management, culture, and process work.
We tried using an outside consultant and felt as though that decision negatively affected the integration due to the consulting team’s inability to portray our culture. They were far too mechanical and just checking things off the list.
We usually work with one of mega firms in case of the deal is large, and the scope would be the key. The more people are involved in the project (like huge projects), the more convenient if we hire a financial advisor as they kindly work as a project manager.
My experience, it is always worthwhile to have someone experienced and having the expertise to hold a fresh hand through the challenging process. The benefits are always valued higher than the price was paid. They will also help you save plenty of time to work through the unfamiliar part of jobs. Professional tools will be introduced too. Before signing a service contract, do the consultants background and experience checks especially the individual on the job not only the firm itself.
I think it somehow depends on the size of the deal as well as the availability of inhouse expertise. For small-caps, working with an outside consultant might be too much. In addition, those companies are less-likely willing to pay their fee as they had too pay (% wise) already too much for all other advisors hired for making the deal happen.
Nontheless, my aim is to become a freelance (independent) post-merger integration consultant myself.
I’ve noticed it really depends on the consultants. Some consultants seem to be very focused on implementing a process which can take up significant time from the business and doesn’t always appear to add value. Nevertheless, the learnings they bring from other integrations can be helpful.
Based on my experiences working with M&A consultants, I would recommend clearly defining the scope. On one hand, for a large acquisition of a company in the same industry and country, you might need “pair of hands” approach for swing capacity. On the other hand, there may be areas of expertise that are needed such as navigating complex employment laws. Cultural fit is important as well in situations where the consultant is actively engaging with the broad deal team versus primarily back office tasks.
- You must be logged in to reply to this topic.
