The excitement of signing an agreement is one of the most exciting aspects of M&A. But that’s only the beginning of the long road to successfully integrating the new entity and meeting the expected financial returns.
The goals they set themselves for revenue growth and synergies are often used by acquirers to evaluate the success of their deals. When these targets are met or exceeded, the acquirer believes they have succeeded in creating value through M&A. But the reality is that these successes typically come at a cost to the existing business momentum and efficiency of operations.
In order to avoid this, the businesses that are acquired should ensure that they have a clear and established integration plan in place before the deal closes. The planning process must include thorough due diligence to test the plan’s feasibility and make sure that the right resources are available.
There should be a manager team ‘deal champion’ who proactively drives the deal process to completion and collaborates with advisers during the assessment phase is essential. This can help avoid the trap of losing interest during the M&A process, which could lead to deals falling over in mid-process.
For acquiring companies to accelerate and improve their M&A processes, it’s crucial that they have the right understanding of the capital markets. PitchBook’s objective, reliable information helps companies better justify their valuations, organize discussions and promote efficient M&A.