Board of director experience is a valuable skill in a Merger and Acquisition as knowledge gathered from previous experience can be brought to bear during negotiations and post-merger integration.
The experience of a Board of Director in the M&A arena is an excellent and necessary ability for any corporate investor. The M&A process requires a vast amount of organizational and financial experience, not to mention the expertise in managing both complicated companies and cultures. A board member’s skillset as observed by Fintalent’s Board of Director experience consultants can be invaluable for any company looking to grow by acquisition or merger, as well as for those that are looking to do a divestiture.
The equity financing side of a transaction cannot be ignored either, as it is one of the only ways to finance an acquisition or merger. The market in its current state is not one that allows companies to make same day decisions on acquisitions, especially if money is involved in any way. A board member with experience in using various forms of financing as a tool for an M&A could help decide which type of financing would be best for both parties involved and the company being acquired.
There has been a lot of talk about board members’ skillsets and the capabilities that they bring to their respective companies. However, if a company wants to participate in M&A, having a board member with experience in the field can be of great assistance.
As stated above, the experience of a Board of Director in the M&A arena is an excellent and necessary ability for any corporate investor. The M&A process requires a vast amount of organizational and financial experience, not to mention the expertise in managing both complicated companies and cultures. A board member’s skillset can be invaluable for any company looking to grow by acquisition or merger, as well as for those that are looking to do a divestiture. There are many different types of acquisitions and mergers, from very large to very small. Although there are some that are more complex than others, acquisition and merger tactics remain the same. The art of negotiation between the acquiring party and the company being acquired is what can ultimately make or break an M&A deal. A board member used to conducting this type of transaction could help determine how to set realistic expectations for both parties involved in the deal, as well as for the entire process of carrying out that transaction.
The equity financing side of a transaction cannot be ignored either, as it is one of the only ways to finance an acquisition or merger. The market in its current state is not one that allows companies to make same day decisions on acquisitions, especially if money is involved in any way. A board member with experience in using various forms of financing as a tool for an M&A could help decide which type of financing would be best for both parties involved and the company being acquired. There has been a lot of talk about board members’ skillsets and the capabilities that they bring to their respective companies. However, if a company wants to participate in M&A, having a board member with experience in the field can be of great assistance.
A board member’s credentials should be considered when conducting a due diligence process on the company being acquired. A board member who has been involved in similar deals will not only be able to relay pertinent information but could also give an insight into how the company works. Additionally, they will be able to pull out information that makes it seem like a great fit between the two companies and either making or losing a great amount of money at the same time. Those who have knowledge in this area are priceless, as they create synergy and add value to any deal.
There are also different ways to look at an acquisition. One way is to look at it from the shareholder’s point of view; another way is to view it from how it affects the company as a whole. A board member could discuss how this deal could be beneficial for both parties involved and at the same time, what the financial benefit would be for the company. That being said, this type of discussion should not take away from determining if the company is viable and will make money in the long run.
To conclude, a board member’s skillset should be used as much as possible when conducting an M&A transaction. It should not be forgotten that a board member has the ability to make or break an acquisition and a merger. Moreover, they have the potential to create synergy and build value at the same time. M&A is a crucial aspect of corporate development, and having a board member with this experience can make all the difference in the world.
