Mastering Multiple Acquisitions and Staying Sharp Through Back-to-Back Deals

Strategic Alignment and Goal Setting

Aligning each M&A deal with your company’s corporate, business and operational strategy and vision is necessary. Otherwise you're just paddling around in circles if you’re not rowing in the same direction.  A company’s corporate strategy should be the “one ring that rules them all” and all business units and functions need to align to the strategy.  And every M&A opportunity should align to said corporate strategy in some way, shape or form.

Each and every considered M&A opportunity needs to start with the following three key focus areas and deliverables -

•  The deal strategic rationale, which is a fancy way to say “what problem would acquiring this company solve for us”.
• The deal value drivers, ie., what value is this deal going to bring to the company. Whether in terms of, product, technology, revenue, new market and ensure these value drivers are measurable.
• The preliminary integration plan, an initial plan of how the “to-be” acquired business / asset / or team will be integrated…or not.

Every deal needs a clear, measurable goal, a ‘North Star’ that all work and outcomes are aligned to.  The North Star should  be grounded in solid market insights, aligned with your company’s operational capabilities,  and realistic in terms of what your company can actually pull off. Clarity is king.

How to Structure Your Team for Success

It’s important to get the right M&A team sorted and engaged very early in the deal process.  Some companies have full time M&A integration teams, some do not.  Some companies fully outsource their integration capabilities. Personally, I’m not a fan of the latter, largely because I’ve only always been a part of a full in-house integration team and capability.  Get the right folks in the driver's seat from the get-go. 

Integration leaders are your secret sauce—they guide their teams through the maze of each deal, ensuring all the strategic and operational boxes get ticked.  Experienced integration leaders can see around corners, they are incredible planners and problem solvers who lead disparate teams to achieve amazing outcomes.

For most deals, I like to see the Integration Leader (IL) engaged as early as possible.  I believe having the IL engaged in the early strategy discussion is key because it ensures that there is consistent understanding of the deal strategy across team members as the deal progresses. 

Other key integration team members that need to be involved early include legal, finance and HR and they need to work in lock step with their corporate brethren and/or business unit colleagues.  The real glue of any integration team are the Project Managers. 

These are the team members that stitch together all of the disparate facts, data, plans, meetings, notes, and conversations into the dashboards that provide a cohesive view of the deal and its integration status.  

I personally am a fan of small nimble and agile integration teams.  A big team can easily get out of sync and lose sight of the North Star.  A small team can move quickly and in unison.  And a small team can pull in resources as needed.

• For more insight in how due diligence and integration planning can work hand-in-hand check out this interview -  How to Run an Integration Led Confirmatory Diligence Process

Due Diligence and Technological Integration

I have to admit that I have been working long enough to have done confirmatory due diligence when the responses to many due diligence questions were compiled in folders in banker boxes with reference labels, all in a conference room in a law office. 

I ended up with so many paper cuts that I’m not sure my fingerprints would actually register a print.  Nowadays, we can perform smarter due diligence by leveraging virtual data rooms.  And I can only imagine what AI is going to bring to the due diligence process.

Technical due diligence continues to evolve , helping buyers ensure they are getting the technology they are paying for.  There are numerous companies that offer great tools to assess the quality of the code base, the overall architecture, and the extent of open-source usage and related licensing.  And all of that further informs the buyer if they are ‘getting what they’re paying for’.

One final point on due diligence is that this is the time when buyers should start integration planning in earnest.  Concurrent and informed integration planning will likely raise questions that need to be addressed during due diligence.  The sooner you have a solid integration plan, the sooner you can begin driving value from the acquisition.

• For more insights on how to ensure a successful integration and measure that success, check out our interview on How To Succeed in M&A Integration.

Adaptation and Decision Making

Today, there are a number of integration planning platforms out there.  These tools allow the buyer to plan their integration and track execution against plan.  From my experience, integration planning is not a one-time plan.  Integration planning is a series of decisions, updates and continuous checking on alignment with the North Star. 

The integration plan will naturally evolve as the buyer continues to learn more about the to-be acquired business.  The one thing that should not change is the deal strategy or “North Star” that the plan is  built against.  Integration planning is all about learning and adapting through due diligence.  And most likely the integration plan will somewhat evolve even post close.  

The integration plan is a collaborative effort between the deal executives,  their business colleagues and the integration team.  The integration plan is typically built in support of the deal value drivers agreed upon by key business and deal decision makers early in the deal process. 

Integration Frameworks and Case Studies 

Integration planning and integration frameworks are best when kept simple.  Frameworks give the integration teams the ability to keep things simple, agile, nimble and streamlined.  The acronym is ‘sans’, French for without; without complexity in this case.

M&A integration tends to become more complex  - over time so starting simple is best.  I say this knowing that simple is hard.  Simple frameworks are the backbone of effective integration and create an environment that can adapt, react, and drive faster and more deliberate decision making and outcomes..   

• For more insights on streamlining your approach, check out our interview on updating your M&A management approach.

Conclusion 

You might be wondering how all of the above addresses the headline of - Mastering Multiple Acquisitions and Staying Sharp Through Back-to-Back Deals. As my M&A finance integration colleague at a former company used to say - “every deal is like a snowflake - unique in its own way”.

Running concurrent M&A integrations is like a two-ring circus: lots going on, maybe slightly less entertaining, and one needs to keep their head on a swivel and pay attention at all times.

The biggest challenge in my experience running concurrent integrations is keeping the projects separate, keeping the teams focused on their specific project and to ensure that all eyes remain on the respective North Stars of each deal. And, of course, to embrace sans to one’s best ability.

Additionally, it is vital to take care of your integration teams. I have long ascribed to the view that the deal team acquires value and the integration team creates value. The teams in the trenches, and working with the business, are the ones that are enabling and realizing the deal value drivers which lead to successful M&A integrations.