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Acquiring companies is a long and complex process, that involves multiple teams. And from sourcing deals to integration, every stage offers opportunities for improvement. In this article, we will discuss key execution insights that can enhance your M&A practice, based on real-world experiences shared by Davis Thacker, Chief of Staff and Head of Corporate Development at Carta.
“Whether or not you're doing concurrent deals, if you want to be efficient, especially with multiple deals, you need a playbook, and you need to stick to it.” - Davis Thacker
Aligning M&A Strategy with Business Growth
As your business evolves, so should your M&A strategy. Adapt the types of deals you pursue based on the size and growth trajectory of your company.
For example, a $400 million business will have different acquisition targets compared to when it was a $50 million company. At a larger scale, focusing on smaller deals may no longer be sufficient. Instead, larger acquisitions that offer $100 million opportunities become more relevant.
However, adopting a "barbell strategy" allows for a mix of smaller, easily integrated deals alongside larger, more complex ones. This ensures flexibility in execution and helps balance the risk and effort involved.
Continuously reassess your M&A focus to match your company’s growth, and tailor your strategy to capture both small, quick wins and larger transformative opportunities.
Prioritizing Early and Consistent Integration
Successful integration is a cross-functional effort that involves more than just the corporate development team. The key is to bring integration planning into the process as early as possible, ideally before the letter of intent (LOI) is signed. By involving integration teams upfront, you can foresee potential challenges and avoid last-minute surprises.
Consistency in integration is also crucial. Having a standardized playbook for how you handle employee retention, deal structuring, and warranties will streamline processes across multiple deals. This prevents unnecessary confusion and reduces the administrative burden on HR, finance, and legal teams.
Driving Accountability Across Teams
One of the most important lessons in M&A execution is ensuring accountability. While corporate development typically oversees the M&A process, the integration phase should involve day-to-day business operations. Embedding integration within strategy and business operations ensures that the teams most familiar with the company’s pulse are driving the integration forward.
The people leading the deal should remain accountable for its success, but those embedded in the business are better equipped to manage the detailed execution. This creates a collaborative, cross-functional environment that ensures a deal is not only closed but integrated smoothly into the company’s operations.
Managing the “Messy Middle” Deals
Medium-sized deals often present unique challenges, particularly with integration. These deals are large enough to require significant effort but may not have a material impact on overall revenue. It can be difficult to prioritize these deals, leading to potential misalignment in strategy.
To address this, ensure that you are clear on the strategy for every deal. Define the level of integration effort required and whether it aligns with your company’s overall goals. By maintaining clarity in strategy, you can avoid the pitfalls of the “messy middle” and focus on deals that provide meaningful value.
Developing a Playbook for Cultural Integration
Cultural integration is often overlooked but plays a critical role in M&A success. Different companies may have contrasting cultures—some may prefer documentation-heavy workflows like Notion, while others may rely more on meetings and face-to-face interactions. Understanding these nuances helps bridge the gap between the acquiring and acquired companies.
Maintaining transparency and involving cultural leaders early can help ensure a smooth transition. It's essential to create a consistent employee experience across different teams, especially for international deals. Cross-pollination between teams, like sending employees to different offices, helps foster understanding and shared values.
Build a playbook that considers cultural differences, and use it to guide the integration of people and processes. This fosters a unified company culture while respecting the acquired team’s unique practices.
Involving the CEO at the Right Time
The CEO can be a key asset in closing M&A deals, especially in founder-to-founder transactions. However, the CEO’s involvement should be strategic—introducing them at the beginning of the deal to build rapport and then again at the closing stages to finalize critical details.
Avoid involving the CEO in the middle of the process, as this can bog them down in operational details better handled by the deal team. Leverage the CEO’s influence wisely.