A M&A transaction is a very complex sale process. In order to ensure the success of the deal closing, there are a number of issues to be considered. These are commonly related to the research and deal execution process and the alignment with the corporate strategy.
As acquirers, we must be ready to identify these issues with an experienced team in M&A. A red flag operational and financial Due Diligence is a very useful tool to assess, in a very early stage, whether the acquisition is feasible and adds value. Most of these issues fall in a couple of areas as shown below.
Unclear Corporate Strategy & Research may drive in acquisitions of a non-fitting target companies:
Unclear corporate strategy objectives on the inorganic growth process
Improper research of targets fitting in the corporate strategy, which can affect to the Post Merger Integration process
Failure on targets assessment, strategic or operational fitting, valuation and deal structure
Limited capabilities and resources during the execution process:
Unrealistic process planning, inadequate time and resources allocation
Lack of access to quality business information
Limited experience, access and/or miscommunication in the teams
Effects on the cultural/ language barriers and the execution process approach
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