The excitement of signing a deal is one of M&A’s most exciting moments. But, that’s only the beginning of a long road to integrating the new entity and meeting on expectations for financial returns.
The goals they set for themselves for growth in revenue and synergies are often used by companies that acquire them to assess the success of their acquisitions. The buyer believes they have created value through M&A when these targets are met or even exceeded. However, the reality is that these results often come at the expense of current business momentum and operational efficiency.
To avoid this, acquiring companies should ensure that a clearly defined integration plan is in place before the deal is completed. The process of planning should include detailed due diligence to test the plan’s feasibility and ensure that the right resources are in place.
A management team “deal champion” who actively ensures that the deal process is brought to completion and collaborates with advisers during the process of assessment is crucial. This will help avoid the typical M&A mistake of losing interest, which can lead to deals falling over mid-way through the process.
To speed up and enhance the M&A process, it’s also important for businesses that acquire them to be aware of the capital markets. With PitchBook’s unbiased and accurate data, companies can better substantiate valuations, focus conversations and drive efficient M&A processes.