What is M&A Execution and How Fintalent can help you hire the best M&A Execution Consultants
M&A execution is the process undertaken by a company that wants to acquire or merge with another company. The process involves a number of tasks and responsibilities: from identifying synergies and policies, to documenting the deal and getting regulatory approval. All of which can be carried out using a company expert or by hiring an M&A Execution Consultant.
Fintalent, the hiring and collaboration platform for tier-1 M&A and Strategy professionals is the go-to platform to hire the best and most experienced M&A consultants. Fintalent’s invite-only platform ensures a pool of highly experienced and qualified freelance M&A execution consultants are readily available for hire by hiring managers on the platform
However, even with all the preparation involved in M&A execution, and the engagement of M&A execution consultants, it’s important to remember that there is no such thing as a perfect plan. While every step can be prepared for ahead of time, there are always unexpected events that might impede your progress. When M&A execution is involved in a company’s business plans, it stands to reason that the company has anticipated such events. Aside from unexpected events however, there are three main reasons that an M&A execution might not take place as planned.
Reasons an M&A Execution might not take place as planned
Unexpected events
It’s most likely that you have heard of M&A executions that have failed because of unexpected events, but what are the three main reasons for unexpected events?
Broadcasted message during a critical period: An M&A acquisition may be put on hold for a short period of time if broadcasted information (such as news or stock market announcements) interrupts the critical phase of the transaction.
General conditions: Certain factors will affect a company’s ability to perform an M&A transaction, including general economic conditions and government policies.
Non-performing assets: It may be hard to identify all the assets that enable a company to execute an acquisition successfully. When considering non-performing assets, it is important to know how to identify them as well as their various forms and classification.
Which are the most common M&A Execution mistakes?
Despite the many steps leading up to an M&A transaction, there are certain things that should never be forgotten in the process. These are some of the most common M&A execution mistakes and how you can avoid making them.
Planning: It is important to plan ahead for everything concerning an acquisition, especially when it’s your company that’s being acquired by another one. In order to have a successful M&A execution, you should prepare your team, your company’s policies and processes when it comes to acquiring new businesses as well as prepare yourself as a company executive.
Lack of preparation: If you do not prepare yourself prior to an acquisition, you will most likely not be ready when it actually happens. The acquisition process can take a long time and having a quick response to an unexpected event may cause both companies to loose time.
Lack of compliance with regulations: The policies that your company has in place regarding M&A transactions should be interrogated before the actual transaction takes place. By doing so, you will ensure that your company’s policies and procedures are just as well prepared as you have already thought through during the planning stage.
How Can You Successfully Execute an M&A Transaction?
Drawing from the merger of 2 major transactions involving Verizon/Yahoo and Time/Warner Incorporated, both companies had to successfully execute their M&A transactions. While the processes were different for each of these companies, they did share a few similarities when it came to their preparation. Here are some of these similarities:
- Prepare yourself for unexpected events: Apart from the specific steps outlined in your business plan, you will also need to prepare yourself for the unexpected when it comes to executing an M&A transaction. In order to do so, make sure that your company has prepared all of its policies and procedures in case of such events.
- Your board should be compliant with the M&A transaction: In case your board is not in compliance with the M&A acquisition, you might not be able to complete the transaction. So it is important that your board is aware of all the procedures taking place and what needs to be done in order for an M&A transaction to take place. The board’s role during an M&A execution is outlined in our articles about how to successfully get a Board Approval and the Role of Board Members During Deliberations.
- Identify benefits and synergies: For both companies involved, identifying benefits and synergies was crucial when executing an acquisition. The main idea behind synergies is to gain from the other company’s strengths, while minimizing the weaknesses. Therefore, it is important to outline as many synergies as possible during the process of getting ready for an M&A transaction.
- Understand your company: In order to have a successful M&A execution, it is important that you understand your company’s strengths and weaknesses. Your board should also outline all of your company’s policies and processes when it comes to executing an M&A transaction.
- Alignment with the customer: In order for your customer base to be supportive of any acquisition deal, they must feel that they are getting something out of the deal as well. Therefore, it is important that you communicate with your customers regarding any potential acquisition and as to how they can benefit from it.
- Make sure your company is ready: After you have toiled over the process of completing an M&A transaction, make sure that you are ready for the execution. You should also be aware of all the paperwork that is required by doing so, including legal requirements and other processes that are critical when considering an M&A transaction.
How To Prepare For M&A Transaction
Whether you are creating a new business unit or acquiring one, there is always a lot of work and planning that has to be done before actually completing an acquisition. The first step towards executing a successful transaction is creating a well-defined business plan. This plan should include all of the steps that need to be taken in order to prepare for an M&A transaction, from making a decision to go ahead with and complete an acquisition, to gaining customer support and having your company comply with regulations. Other key steps include:
- Prioritize Your Priorities: Prioritizing your acquisition priorities is one of the most important steps in preparing for an M&A execution. In order to prepare for an acquisition, you need to know what needs to be done, and what steps can be left to more ill-defined goals. Make sure that you have written down all of your priorities in a comprehensive business plan, including all of the steps that you will take after selecting the target company, before selecting them as a potential acquirer or seller.
- Assess Your Motivation: When deciding on how serious you are about completing an acquisition transaction, it is very important to know exactly why are you doing so. You should be able to identify the benefits of completing an M&A transaction for you company. This way, you will know what benefits you must have as your motivation for completing an acquisition. In addition, find out if it is a good deal for your company as well. For example, there are many cases of investors who have made billions of dollars by selling their shares in companies that they bought later on and which they did not want to acquire any further. In order to make sure that you are not one of these people, consider all the benefits that you could get from completing an acquisition, such as making a profit or gaining more customers.
- Determine the Costs: It is very important to know all of the costs that you will have to pay when it comes to completing an acquisition. It is not necessary for you to calculate these costs right away, as it can take some time before you will be able to afford them. However, when calculating the cost of completing an acquisition, it is important that your company has a solid business plan and a clear understanding of its finances. Verify whether your potential acquirer has enough capitalization in order to make an offer, and how this capitalization compares with your company’s own capitalization. In addition, calculate the amount of money that you will have to pay in order to complete the transaction. This amount is not only calculated by the purchase price, but also by any debt that your company may take on in order to complete the transaction. In addition, consider your company’s cash flows if possible. The more cash flow your company generates on a daily basis, the less it will cost you to complete an acquisition.
- Examine your Staff and Company Structure: One thing that you should do before deciding which acquirer or seller would benefit your company more is identifying who from within your company would be a good candidate for completing an acquisition deal. In the case of new businesses, it is best to identify your company’s most important staff members who will be needed in order to complete an acquisition deal. It is important that you do not choose every single person from your company, as this will make it very hard for you to complete an acquisition. Doing so also has the disadvantage of identifying which staff members are less efficient at their job when compared to their co-workers. Offer your most important employees opportunities to shine, and use them in order to best complete a successful M&A transaction.
- Examine Your Target: When examining the target of your assets, it is very important to inspect it carefully. During your inspection, you will have to examine everything that could be a potential risk for a successful acquisition. For example, you need to trust that the assets you purchase from a seller are in good condition and are not damaged in any way. Also make sure that the company’s staff members are trained and ready for their new jobs in your company after completing an acquisition deal.
- Know What You’re Buying: If your company is completing an acquisition of assets, it is important that you have a clear understanding of what assets it is buying from the target company. It is very important to make sure that the assets your company purchases from another company are in good condition, and that you are getting them for the right price.
- Get Your Finances Ready: One of the most important steps in preparing for an M&A execution is having your finance ready as much as possible. This means that you need to be able to afford a certain amount of financial compensation without endangering your company’s future operations. You need to make sure that your checkbook can easily pay for what you are buying from the seller or acquirer. In addition, it is important that you calculate all of the costs for completing an acquisition transaction, as well as how much your company will have to pay in taxes when paying these costs. In order to do so, we suggest that you use our financial calculator in order to better understand how much your company will have to pay when completing an acquisition.
- Discuss the Deal with Advisors: When you think that your company is ready for a successful M&A transaction, it is very important that you get some advice. During this stage of preparation you should contact advisors who are experienced with completing M&A transactions. For example, you may want to contact an investment banker who is experienced in completing M&A deals for your company. These advisors can help you with the process of completing an acquisition transaction and helping you identify opportunities for your company to acquire other companies or assets. They will also be able to provide you with the best possible deal that could benefit your company and improve its performance significantly.
- Prepare Your Investment Decisions: Not every company is able to complete a successful M&A transaction, as it requires a lot more than just choosing a target. In order to complete a successful M&A transaction, the company needs to have the right amount of capital in order to acquire the assets it wants. In addition, it needs to have a solid understanding of how much money it will have to pay in order to complete an acquisition deal. In addition, think about the various strategies that you could use in order to protect your investment when completing an acquisition deal. For example, one of the most important things that you should consider is how you could protect your investment from any potential risks that can happen during the preparatory stage.
- Complete the Deal: Now that your company is ready to complete an acquisition deal, it is time to finalize the transaction. Complete it by contacting the seller’s agent and negotiating with him or her. Make sure to reach an agreement, and contact your legal advisors in order to make sure that you are not breaking any laws during the deal. If everything goes as planned, you will be able to complete your acquisition deal quickly, and start benefiting from its results as soon as possible.
Factors That Can Affect Your M&A Deal.
Every deal that you complete has a number of factors which affect how well it goes. Understanding the most important factors that can affect your M&A deal can help you take a lot of the risks that are involved if you want to increase the success rate of each deal you complete. These include:
- The Value of the Asset You Are Buying. If you are acquiring a company, then its assets are also one of the factors which can affect your acquisition deal. There will be different prices available for these assets depending on their condition and size. It will be good if you choose a company which has good sales and profit margins, as well as a healthy balance sheet. You may want to talk to the seller of the company first and discuss how much is he asking for its assets.
- The Benefits Which You Will Get from Completing an M&A Deal. As we have mentioned in previous chapters, completing an acquisition deal can help your company reach a number of objectives. For example, you might want to complete an acquisition deal so that you can gain market share, get access to new resources, or increase your sales. It is very important that you think about all of the benefits which you will get from completing this M&A transaction to help better understand why it is so important for your company’s future performance and earnings.
- The Legal Aspects of the Deal. The legal aspects of a given M&A deal are very important because they not only affect you in terms of what you are going to pay for, but they may also affect your company’s future operations as well. If you want to make sure that your acquisition deal goes without any problems, then it is important that you consult an attorney before completing the deal.
- The Closing of the Deal. Closing the deal is one of the most significant phases when it comes to completing and making an acquisition, especially when agreeing on how much everything will cost and how it will be funded. When it comes to completing an acquisition deal, the closing of the transaction plays a very important role in showing what your company values, and in showing its intent. If you want to make sure that your M&A deal closes on time, then it is very important that you have a good understanding of how much time it will take to complete all of the required procedures.
- The Regulatory Aspects That Can Affect Your M&A Deal. Legal aspects are only one part of the regulatory matters which could affect your company’s performance in an undesirable way. You need to make sure that these regulatory aspects are addressed before completing the deal or acquiring another company. These include requirements like making sure that your M&A deal is in line with all of the local tax codes, and that you have the right amount of capital available to complete an acquisition deal. In addition, make sure that you are aware of all of the regulations which are required in order for you to buy and sell a particular type of asset. If you fail to understand these regulations, then there is a possibility that you will go through some additional procedures which could delay your M&A deal.
- The Personal Aspects Which Can Affect Your M&A Deal. Personal relationships can also affect how well your acquisition deal will go. If you want to make sure that the deal goes smoothly and you will be able to get the maximum benefit from it, then it is very important that you manage your risk by keeping in close contact with the seller. When it comes to completing an acquisition deal, keep in mind that some people may be biased towards their former companies, and have a tendency to show their negative feelings towards them. You need to keep in mind that they might not be able to successfully complete their own deals, which could later impact your M&A transaction negatively as well.
- The Economic Factors Which Can Affect Your M&A Deal. Some of the factors which can affect your acquisition deal are completely outside of its control. These include factors such as economic conditions and the exchange rate, which can make or break a deal depending on what they are. You need to analyze each of these factors to make sure that you do not ignore a very important aspect of how the deal can go.
Why you should hire Fintalent’s M&A Execution Consultants
M&A deals can be considered as a very delicate process, and as such, it is important for each of them to be conducted at the best possible level. It would not be wise for anyone to take on an acquisition deal without carefully examining every detail of it, and getting advice from experts who have dealt with such matters before. Fintalent offers hiring managers the platform to hire some of the best M&A execution consultants globally. With Fintalent’s M&A execution experts, hiring managers can avail themselves the opportunity of selecting from a large pool of experienced experts from across the world.
