The excitement of negotiating a deal is one of the most exciting aspects of M&A. However, that’s just the beginning of a long journey to integrating the new entity, and delivering the financial results that are expected.
The goals they set themselves for revenue growth and synergies are often utilized by companies that acquire them to assess the success of their deals. The acquirer believes that they have added value through M&A when these targets are achieved, or even exceeded. But the reality is that these successes usually come at a cost to the existing business momentum and efficiency of operations.
To avoid this, the businesses that are acquired must ensure that they have a clear and well-defined integration plan in place well before the deal closes. This process of planning should include thorough diligence to verify the plan’s feasibility and ensure that the right resources are in place.
A management team “deal champion” who actively ensures that the deal process is brought to completion and collaborates with advisers during the assessment phase is crucial. This can help avoid the common M&A mistake of losing interest, which can cause deals to be canceled mid-way through the process.
To speed up and improve the M&A process, it’s also essential for acquiring businesses to have the right understanding of the capital markets. PitchBook’s unbiased, accurate information helps companies better justify valuations, focus like it discussions and facilitate efficient M&A.