The rapid pace of change has seen these pillars take on new significance over time. Technology, for instance, has made gathering information on potential targets exponentially easier than in the past. Similarly, the advent of online data rooms has significantly sped up the due diligence process.
Mergermarket and Vintage gathered five experts to discuss how the dealmaking process has changed. As well as this, they offer up the lessons they have learned, through decades of dealmaking experience, regarding what makes for successful M&A targeting, negotiation, due diligence and integration.
Q: In your experience, what lessons did you learn for this stage of the deal?
Brian Moriarty, former Vice President, Hewlett-Packard > You have to keep a broad, open and creative mind when it comes to thinking about targets. Of course you have to be out there in the market physically — that means going to trade shows and, especially in tech, being close with the venture capital houses.
It’s also vital to listen to your customers and sales people. Some of the best deals I’ve worked on have come from the sales force. In addition, your corporate development group should bring an outside perspective that might refine what you need.
Karim Motani, Corporate Development and Strategy Director, 1800flowers.com > I’ve always worked for patient buyers or acquirers, and in many instances I have realized that patience does pay.
For example, a deal we recently closed was with a target that we had been circling for close to ten years. The firm had changed hands in that time, but we kept good relationships with the successive owners and eventually found ourselves in a place where the timing and rationale was right to do a deal. Our patience was rewarded.
Jeff Drazan, Managing Partner, Bertram Capital > We know when to stretch and when not to stretch from a valuation perspective. It all comes down to the investment thesis on value creation.
We know with high confidence what we can and cannot do.