Successfully navigating a merger or acquisition requires a sophisticated business exit strategy. Here we present insights from experienced leaders in tech M&A.
- Emotional involvement can hinder the M&A process, potentially revealing deeper issues to the due diligence team.
- Early familiarisation with potential buyers ensures alignment and helps streamline the M&A process.
- A backup plan is crucial to mitigate risks in case the primary deal falls through.
- Maintaining momentum post-deal ensures successful integration and realisation of the original M&A vision.
Successfully navigating a merger or acquisition requires strategic planning and understanding. Industry leaders emphasise the importance of having a robust business exit strategy to ensure that such significant business transitions proceed smoothly.
Emotional involvement has been identified as a potential obstacle in the M&A process. During the due diligence phase, leaders, especially founders, may struggle with their company’s detailed scrutiny. Nick Thompson from Moore Kingston Smith advises maintaining objectivity. He cautions against letting emotions interfere, as this could raise suspicions of underlying issues. Remaining cooperative with the due diligence team is essential, as a positive relationship can prevent unnecessary complications in the transaction process.
Early familiarisation with buyers is recommended to avoid pursuing unsuitable deals. Mark Simons of Prime Networks advocates identifying and understanding potential buyers before entering the M&A process. This early engagement reduces the likelihood of misalignment and allows companies to conduct self-assessments. Simons suggests that vendor due diligence can pre-emptively address potential issues, with advisors playing a vital role in providing the necessary insights. An advisor can bridge knowledge gaps, ensuring a thorough understanding of both the business and the prospective buyer.
Having a backup plan is critical, as not all M&A deals reach fruition. Dominic Ward, CEO of Verne, shares his experience of a deal falling through at the last moment. He recommends maintaining good relationships with other potential partners, as these can be invaluable if the primary deal fails. This approach ensures that businesses remain agile and prepared for unforeseen circumstances, enhancing their resilience in the unpredictable M&A environment.
Maintaining momentum post-deal is indispensable. Ruth Collett of The Adaptavist Group notes that post-transaction, companies often lose energy, thinking the hardest part is over. However, the integration phase is where the real work begins. Collett stresses the importance of sustaining the initial vision and momentum throughout the integration process to maximise the deal’s benefits. Realising business value requires constant effort, keeping the original objectives in focus.
Informed strategies and careful planning are pivotal in achieving successful outcomes in tech industry mergers and acquisitions.
