Another weekend treat! In this fourth extract from my latest book, The Acquirer’s Playbook, I examine the crucial stage of assembling the right team.
Stage 5 kicks off the second phase of Acquisition Approvals Model. This Phase identifies targets and sets you up for the crucial meetings later.
This phase translates strategy into action. It first defines and then searches for targets that help execute your strategy. But the first step is pulling together the right team.
Stage 5 – Acquisition Team Assembled
Successful acquisitions start with “Remarkable Preparation” including grooming the team and setting yourself up for success.
The composition of the team will vary dramatically depending on the size of the acquirer. Many acquisition team members also have day jobs – the financial controller, the internal auditor, the CMO, etc. Ideally the team leader will also be the chief integrator. It’s important that post-acquisition integration is built into the thinking as early as possible.
It is worth reviewing with the team some fundamentals:
- Acquisition Profile document
- Roles of team members
- How you will process the research of targets
- Approximate timetable of a deal
- The overall Acquisition Approvals
Confirm any connections between team members and target companies. It’s worth doing a little scenario planning regarding different types of targets and deal structures using the team.
Have you set up the financing required or set up financing partners subject to the merits of each deal?
Have you rehearsed the big story of why you are growing by acquisition? Can your strategic goals not be met by organic growth? Examples of strong reasons for acquisitions that appeal to all stakeholders, including shareholders, bankers and analysts, include accelerating growth to seize a window of opportunity in the market. This can be driven by specific channel grabs, technology hard to build in-house or entry into new verticals.
Have you listed the priority exposure areas within targets that require early discovery work? E.g., patents, quality of code, types of customers. These typically are deal breakers. Therefore it’s worth rehearsing your approach as a team.
This is a great time to remind everyone that acquisitions will only be completed if they assist in executing the company’s strategy. It’s about being clear as a team what types of targets make sense. You want to establish a robust process to find and churn relevant targets to allow only the highest priority companies to be contacted. This is a hyper-qualification process.
This stage sets up the target identification work which we will cover in later posts
Of course you could a purchase a copy on Amazon here.
We continue to support acquisitive management team by performing the quarterback role to organize the M&A process, bringing the right players onto the stage with the right script and allowing them to leave the stage at the right time. Our process drives post-acquisition integration into the fabric of businesses.
Reach out to Ian by calling 978 395 1155 or reach out by email Ian@TPPBoston.com.