Building The Perfect M&A Team

You built your company from ground up, or resurrected that company you bought from the brink, or positioned a stagnant company to thrive for the next fifty years. So why in the world would you not leverage the perfect team to help sell your company?

The M&A Problem: The Solo Flyer. Business owners, and in particular smaller business owners, may underestimate the nuances of the M&A deal. He or she may simply “want to get the job done” or may grossly underestimate the complexities of the deal as it relates to employment matters, tax, intellectual property, etc. It is also not uncommon for a business owner to simply want to cut costs or think that he or she can do it on their own.  Key mistakes a business, of any size, can make in contemplating an M&A transaction are 1) failing to even assemble an external and internal team to guide the business through the M&A process, or 2) not assembling a team with the requisite depth of skill, or 3) not getting that team in place as early as possible.  

The M&A Solution: Assemble A Team! It goes without saying that failing to assemble the right team, and a complete team, is costly. The external team should be comprised of legal counsel, valuation experts, investment bankers, and accountants, and others, who not only have the experience in closing deals to ensure the business makes it to the finish line, but who also have the skills to handle the nuances of the transaction. For example, while hiring an M&A attorney is expected, it is equally important to fully vet the legal team to ensure the team has the depth of experience to handle intellectual property matters, cyber security, employment matters including compensation and property, real estate, and tax. 

Your Perfect Team Brings Their Network. Having an external team with a strong network also helps the business ensure that not only are all facets of the transaction are covered, all the professionals who should be present to shepherd the deal are present. While it may be second nature to involve a legal team, that legal team might advise the business owner that it is also recommended to bring in an investment banker, or cyber security expert, or other professional.  For example, when you’re acquiring that software company, you’ll want to ensure that you’ve worked with someone who can help you navigate the waters of cyber security and intellectual property. Essentially, the key is to start with a great core external team who can then also help advise when other experienced professionals might be necessary. 

Communication Wins The Day. The deal is won or lost not only in assembling a great team, but in that team’s ability to work together as a collective for the greater good of the company.  And, assembling a team of experienced lawyers, accountants, bankers, and valuation experts advances nothing if that team is unable to communicate. A great team will meet early on, know and be familiar with all the key players, establish understood methods of over-communication, and regularly meet throughout the process.  Without key and strategic communications, it might be easy to forget “who’s on first” and assumptions can be made that someone else is “doing the job.” While a true team approach is essential to closing the deal, that team’s ability to communicate will be the lynchpin of its success. 

Failing to assemble the right team, as early as possible, simply exposes the business to unnecessary risk.  Even at best, money could be left on the table, loopholes in drafting could lead to litigation exposure, intellectual property mis-steps could result in failing to acquire essential components of the business, and tax implications could be costly.