Strategies to Get More Value From M&A

Mergers and acquisitions can be an enticing prospect. They may boost performance and fuel long-term growth. But they also depend on myriad moving parts and endless decisions. Perhaps the complexity of these undertakings is why most fail. No single list of best practices can guarantee success, but the following strategies can certainly improve your odds. 

Identify Financial and Strategic Value 

Put simply, good M&A deals make good economic sense. This can make that they offer immediate financial value, or that they drive important strategic value. You must understand why you are engaging in the deal, and identify clear benchmarks for value, as well as the strategies you intend to implement to help you achieve various value benchmarks. 

Seek Expert Insight 

Experts exist for a reason. No one can know everything about the M&A process, especially when they are only doing it for the firs tor second time. The right experts can help you achieve value. The key here is not just to recruit quality advisors, but also to empower them to speak up and make decisions. Experts who know you don’t want to hear bad news can’t do much to drive value. 

As a deal proceeds forward, it’s important to involve leaders from both sides of the negotiating table on the integration team. This team uses its expertise to plan for the future. If you don’t have an integration plan, integration may fail before it even gets off the ground. So seek expert opinions on the specific integration barriers you might face, as well as the strategies that can help you surmount those barriers. 

Undertake an Effective Due Diligence Process 

Due diligence can help you identify red flags before they turn into crises. The goal here should be to do more than just move down a checklist. Both sides of the negotiating table must be prepared to assess the business’s strengths and weaknesses. On the sell-side, preparing for due diligence ahead of time may increase value and shorten the timeline to closing. On the buy-side, due diligence is key to integration preparation and can help with identifying potential liability. 

This is where your expert team is critical. Work with legal, financial, and other experts to identify a due diligence checklist that ensures all of your bases are covered. 

Implement Successful M&A Strategies 

Too often, mergers and acquisitions are little more than wishful thinking. All parties to the deal see dollar signs and hope that everything will fall into place with as little effort as possible. That’s probably why so many deals fail. M&A is work, and you must be prepared to oversee the deal and manage the integration for several years. 

Successful M&A strategies share in common two simple features: 

  • They are proactive. Deal makers must know what a successful deal looks like, and have a specific plan for realizing that success. 
  • They are inclusive. It’s not enough to arrive at an agreeable sale price and hope the rest takes care of itself. Skilled deal makers look at a deal from every angle, and then involve key players. Don’t shut out your organization’s leaders, since they can help you ensure you look at all factors—not just the ones you’re biased toward noticing.