Description

Everything about M&A in this episode with our hosts Bain and Perlmutter and our special guest from Metafora… JT Engstorm!!! You will learn some of the main challenges of the M&A process. This process it’s so much more than the transaction, it's about finding the best match, where are the best synergies and who's the best partner.

Learn more about M&A services here!

Things you need to consider in the M&A lifecycle:

When is a good time to look?

If you’re buying:

• You want to find an asset that's a good investment. Ideally there is a strategic rationale above hitting performance targets. Ideally the asset also has a leadership team that aligns with your target future goal of future ownership of the business.

If you’re selling:

• Maximizing valuation.
• Finding the right home, being with the right people.
• Appropriate ongoing financial incentives
• A lot of executives don't pay themselves through cash comp. They're taking distributions off the business. So when they transfer ownership they need to be conscious of what the financial implications are on an ongoing basis so they can be appropriately incentivized to keep doing what they're doing.

How can a company reduce risk when buying or selling?

• Do a quality of earnings: You want to really deeply understand the financials of the business.
• Have strong legal counsel.
• Do an assessment of talent: Consider what could be done by a third party?
• Minimize access to your business: You’re only going to end up with 1 or 0 buyers. If you have 50 potential buyers, cool, but 49 of them are not going to buy you, and they go right back to being your competitor in the marketplace. This is more relevant to a seller.

It is a strategic risk when you have a potential competitor considering a buy and thus having access to your proprietary information.

After being merged or acquired, then the real work starts for the operators. They need to have a management and operating plan, peel another layer on the onion of who's going to be doing what. The business building doesn't stop, it's just entering a new phase.

Do you want to challenge the obstacles of the M&A lifecycle? Are you curious if your strategy is making a positive impact? Do you want to know more about your company's strengths in terms of M&A? We can help you out! Request a freediscovery call here to learn more!