Takeaways from Recent CFO M&A Roundtable

One of the best aspects of my role at Armanino is the opportunity to build communities, establish connections and discuss issues that are top-of-mind for clients. During a recent Path to Unicorn roundtable virtual event, my colleague Bryan Graiff (Griff) and I and several financial executives of high-growth and unicorn clients discussed #mergersandacquisitions as a growth strategy. We had a lively discussion. The best part was that attendees had differing levels of experience with the topic from just starting to evaluate M&A in the current landscape to being serial acquirers. #Peoplehelpingpeople

Here are the top 5 takeaways from our discussion to consider when undertaking M&A as a company:?

Identify the why.??

For what strategic reason are you buying an individual company or starting a buy-side process? Are you looking to buy revenue, acquire talent, gain customers in a new market, or add technology that you don’t have? Are you seeking this out or is it opportunistic? Ultimately, this should be one component of a larger 5-year strategic plan that factors in organic and inorganic growth.?#whywedowhatwedo

Metrics and milestones.?

Going beyond the why, determine the key metrics and benchmarks that define success (EBITDA, revenue growth, market-share, acquihire, etc.). Do this before the deal since it will be part of the evaluation process. Revisit and analyze often. A project manager owning the process is helpful to drive this process forward, check in at key milestones and align to these key metrics and the “why.”??

Considerations surrounding M&A.?

Due Diligence is vital on sell-side and buy-side. In reviewing a company, beyond valuation and growth potential, look at potential tax exposures, as well as deal structure and negotiation. Poor due diligence can dramatically affect the success of a deal and the purchase price. Make sure there is a fit. Avoid complexity or something that is too difficult to integrate. If there isn’t cultural alignment, it’s never going to work.?#duediligence

Communication is essential to a smooth transition.??

Establish synergies (roles and reporting structure, plans for brand conversion, sunsetting technology v. incubating technology, etc.) and explicitly draft them. If you fail to communicate, if the acquired company does not understand the long-term strategy or know where it fits in, you end up wasting time overall. Discuss early, communicate clearly, and repeat frequently.?

Have the difficult conversations.??

Every company you acquire isn’t going to be successful. Continue to visit your goals and?M&A thesis (the “why”). It’s important to be willing to have mature discussions and recognize if it’s not working. If you aren’t meeting the original acquisition goals, assess what has changed and be honest and do something about it.??