Posted on: April 22nd, 2014
The best deals use a merger and acquisitions process model to evaluate, plan and integrate post-closing. Deals are not unlike any other strategic development initiative in a company. When companies are entering into distribution agreements or development arrangements, they usually have a well defined flow of processes that they use to make sure the decision is sound and the execution is carried out. Similarly, companies need a sound mergers and acquisition process model to guide their M&A decisions and execution. This merger and acquisitions process model should include the following steps – screening, evaluation, pre close planning and post close integration.
Successful merger and acquisitions process models balance M&A professionals with operational professionals to provide a balanced perspective. A company gets the best results from this process model when it uses a multi-functional team in each step. Sales people and operations people will have a unique way of looking at an acquisition target. Their input will be useful is assessing the overall desirability of the target. Like any controlled process, there should be segregation of duties and a wall between the originator of the M&A opportunity and the decision maker of the opportunity.
Quality control throughout the process is important. Also, each company must be patient and allow each step of the process model to run its course. While time is the enemy of closed deals, successful deals must be nurtured and operationally planned, lest they will be surefire failures. M&A is both an art and a science. While companies may think that buying another company is merely a financial and legal exercise, the real value is added on the operational assessment both pre and post-closing. The right merger and acquisitions process model will ensure that your next deal is a great one.