Conducting a successful M&A can grow your market share and increase revenue. Our experts discuss how you can ensure a successful M&A deal without falling at major hurdles.
Conducting a successful M&A can grow your market share, increase revenue, and provide a strong competitive edge that launches a new golden era for your company. Although previously, inbound M&A deal values dropped to £109 billion, opportunities remain for ambitious entrepreneurs.
Unfortunately, M&A transactions require a tremendous amount of work, and the process can be stressful for all involved. Organising your team and being sensitive to your needs can increase your deal value and ensure your deal doesn’t fall through at the last minute.
In this guide, we discuss how you ensure a successful M&A deal.
How do you ensure a successful merger and acquisition?
Successful M&A deals begin with defining what success looks like. Determine the primary goal of the deal. It could be growing your market share, eliminating a competitor, or accessing a proprietary piece of technology. Regardless of the reason, define what success means.
Once you understand your goals and have a suitable target business, your success revolves around comprehensive due diligence. Essentially, due diligence involves uncovering the facts and figures about a company, enabling you to confirm or deny your assumptions.
Assuming the deal proceeds as expected, the next step is minimising risk and preventing missed opportunities through clear post-merger integration plans. According to the Financial Times, the rate of M&A integration failure has been estimated at anywhere from 50% to 90%.
In short, everything goes back to planning for success. Taking the time to think will mitigate your risks and give you the best chance of your deal being the next success story in your entrepreneurial career.
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How to prepare your business post-merger or acquisition
Start early to finish strong. Preparing your business post-merger or acquisition should begin before the deal is even finished. This empowers you to hit the ground running and begin the integration process from day one.
There are five steps to a successful post-merger integration:
1. Start Quickly – The first step is to launch your integration process before the deal is even announced. It’s the time to hire a consulting firm to assist in creating a customised plan for making your M&A vision statement a reality.
2. Appoint an Integration Team – Prepare your business through a dedicated integration team. Use the most talented figures from both companies to create a unified team, assign responsibilities and begin the hard work of integration.
3. Plan the Integration Structure – Divide every integration activity into separate categories to avoid confusing the process. Examples could include human resources, finance, legal and sales.
4. Create an Internal Communication Plan – Minimise confusion and bring everyone with you through an internal communication plan. Manage critical messaging and communication from the top down and provide opportunities for employees to be heard.
5. Set Clear Criteria – Outline what the finishing line looks like. Without clear exit criteria, knowing when you have reached the official completion stage becomes extraordinarily difficult. Every department should have appropriate exit criteria.
Preparing your business looks different to everyone. No two organisations will follow the same process, but away from the nuts and bolts of the integration work, the principles of sound preparation remain the same.
Best practices for after an M&A
Recently, the UK M&A market has rebounded. According to PricewaterhouseCoopers, deal values in the first half of 2024 have increased 66% year-on-year to £68 billion. Yet, not all of these deals will be successful.
Veteran entrepreneurs often agree that the hard work of an M&A transaction doesn’t begin until after the deal has been completed, and they’re correct. Follow these best practices after completing your deal to increase the chances of your company thriving:
Speed is your ally in the aftermath of an M&A deal. Rapid integration through a strong sense of urgency beats caution every time. After all, the mistakes of going too slow are far more cataclysmic than the mistakes of going too fast. At no point should you be unclear as to what your next move is.
The importance of an M&A consultant
Working with a specialised M&A consultant to manage your deal and the post-merger/acquisition process is an investment that can repay itself many times over. The core challenge of the post-deal phase is integration while keeping the organisation's day-to-day functions running.
Bringing in an M&A consultant as support provides access to the experience and resources only a consultant can bring. Moreover, consultants are outsiders and can deliver fresh new perspectives to the table. In other words, they support you in seeing the forest for the trees.
Some of the benefits of hiring an M&A consultant during this sensitive stage in your journey include:
At Hilton Smythe, our M&A consultants possess decades of collective experience. Get the objective advice and guidance your firm needs to make its next M&A deal a success by contacting the team now.