How to Do an M&A Deal Right
Doing a mergers and acquisitions (M&A) deal?
One of the biggest things to consider during a transaction is surrounding yourself with the right people. It makes all the difference.
What do I mean? Here are two examples from deals I’m currently working on about what to do… and what not to do.
The Right Way to Do an M&A Deal
Client A is incredibly intelligent. Yet he knows that to ensure the deal is successful, he needs to surround himself with the talented people necessary to identify opportunities and avoid harm.
On this deal, my role is M&A advisor and coach. We have the attorney, CPA, insurer, real estate specialist, human resources advisor, and marketing specialist — who all have deal experience — along with the key leaders in the business, all engaged on a weekly basis until the deal is done.
…And the Not-So-Right Way
Client B is also incredibly intelligent, but he doesn’t trust the team or advisors around him. He is looking to purchase a business that will increase its capacity — basically doubling in size. A noble thought, and the right target would accomplish that goal.
Yet the owner is surrounding himself with only his CPA and his attorney. The CPA basically just prepares his tax return and advises him on how much he’ll pay in taxes this year. The attorney is a family friend who has never done a deal before, but he’s a lawyer — so “he’ll figure it out.”
I get involved only when the client gets stuck or needs to talk something through (i.e., complain). I try to help, but he won’t do anything to remedy it.
Two Takeaways for You
Deals need to be invested in. You can’t “cheap” your way through one. Enlist the right advisors to vet the deal initially and bring it to completion. At a minimum, you need a business attorney who has done a deal, a CPA who understands structuring, and an M&A advisor to guide you through the deal. Depending on the target and complexity, you may add other advisors as necessary.
Deals are a significant shock to any business system. If not done the right way, a deal can be disastrous to your business. Avoid irreparable harm by surrounding yourself with people you trust to see it through.
If you are thinking about doing a deal, let’s talk. I want to help make sure you’re approaching this the right way, before you get too far down the road.