Lessons Learned During M&A Process

[Anonymous]

Currently in a buy-side role, my lessons include firstly, involvement across departments, second clear communications and coordination throughout the process, third identifying the key deal drivers and breakers.

Firstly, M&A is not run in silo by the investment team or corporate development team, as post-acquisition, other business departments will have to continue the work to realize the value assumed in the valuation. Hence, business departments are critical in providing inputs, identifying risk factors, and agreeing to the final terms attached. This also helps minimize conflict across departments when an acquisition goes wrong.

Second, M&A is an intense 6-month to a year effort, involving multiple stakeholders internally and advisors externally. It takes much effort to communicate and negotiate internally and externally to ensure a consensus is reached among all parties and to avoid miscommunications.

Lastly, after deal diligence and interactions with the target company, there are often critical deal drivers and breakers that could cancel the deal totally. Understanding what are the “red lines” and what are the “negotiables” are critical in deal negotiation.

[Author]

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