Common Misconceptions About M&A Explained – Part 2

This post is part of a series on common misconceptions about acquisitions I’ve encountered over the years as an advisor. To read the first post, please click here.

Misconception #2: You Can Execute an Acquisition “On the Side”

Many underestimate the level of effort required to complete a transaction. An acquisition is a significant undertaking and you must be willing to commit the resources – time, people, and finances – to the initiative to be successful.

Please do not go into an acquisition thinking you can simply do it “on the side” without rearranging some of your priorities. We have talked to countless folks who come to us, wondering why their acquisition search isn’t producing results. On closer inspection, we learn they are focusing on M&A only “when they have the time.” For many busy executives with a day job and an already full plate this translates to hardly ever!

Think about this: Many larger firms have an entire team of corporate development professionals whose job 100% of the time is to look at acquisitions.

While most small and middle market companies don’t have a dedicated M&A team, they can still undertake acquisitions successfully. Here are two pieces of advice:

  1. Dedicate the resources – Recognize the investment needed to be successful at M&A and make the choice to commit to this path. Be realistic about your goals and what you wish to accomplish, who will be on your M&A team, and what resources you have available. You may need to say “no” to some opportunities to remain focused while pursuing a strategic acquisition. 
  2. Ask for help when you need it – While there are many aspects of the acquisition process you can do internally, sometimes it may be best to hire an advisor. Experienced advisors will accelerate the M&A process and can undertake certain aspects of the process efficiently, freeing up your time to do what you need to get done. For example, your M&A advisor will understand how best to successfully approach an owner about acquiring a not-for-sale company while your M&A lawyer will help you navigate the legal ramifications of a deal.

Don’t take on M&A half-heartedly. When you decide to pursue a strategic acquisition, devote the right amount of attention and resources to the process.

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