Virgins, Cheerleaders, and Mergers & Acquisitions
-
-
- alisterpaine
- added this
With every economic downturn, there’s a flurry of mergers and acquisitions as a result of lowered market value, lower-tiered companies threatened to fall off the grid, and companies with a cash hoard searching for bargains.
With this in mind, it occurred to me that approaching M&A deals mirrors dating in many ways. Here are a dozen parallels I thought about.
1- Be wary of virgins. Most of you are probably too old to remember, but let me remind you: house of pain. If at least one of the participants has never been through an M&A deal, there’s great potential for misunderstandings and misfires. If you’re dealing with an M&A “virgin”, take your time, take the lead in communicating the plans, and watch every step of the deal. If you’re the “virgin”, educate yourself and surround yourself by trusted advisors who will guide you on what to expect.
2- Make sure you share core values. If you were raised in a hippie family and your date is from an ultra-conservative family, it makes for a good Hollywood flick, but you know in real life you have lots of work ahead of you. Make sure to evaluate the company’s corporate culture, fiscal management policies, long term strategies, and other core values that need to fit your company’s value system for a healthy deal.
3- Heed the early warning signs. Remember that guy who checked out every woman who walked through the restaurant on your second date? Sure he was cute, but you knew better. I once witnessed a deal where the acquiring company had hit a wall with lack of growth and few new products in the pipeline. The SVP of sales and marketing had quit over the weekend never to return, the CEO was under intense pressure from the board to increase top line results, and the company was on an acquisition spree. Some of the targeted companies had noticed the warning signs but went ahead with the deals anyway. Needless to say, some of those deals went south in no time. Has the company you’re considering recently lost key employees, major customers or partners? Are they playing their cards too close to their chest? Are they having trouble refreshing their product line? Have they seriously reduced their marketing and advertising activities? May be time to step back and reevaluate the situation.
READ THE REST OF THE ARTICLE HERE: http://www.alisterpaine.com/mergers.html
With this in mind, it occurred to me that approaching M&A deals mirrors dating in many ways. Here are a dozen parallels I thought about.
1- Be wary of virgins. Most of you are probably too old to remember, but let me remind you: house of pain. If at least one of the participants has never been through an M&A deal, there’s great potential for misunderstandings and misfires. If you’re dealing with an M&A “virgin”, take your time, take the lead in communicating the plans, and watch every step of the deal. If you’re the “virgin”, educate yourself and surround yourself by trusted advisors who will guide you on what to expect.
2- Make sure you share core values. If you were raised in a hippie family and your date is from an ultra-conservative family, it makes for a good Hollywood flick, but you know in real life you have lots of work ahead of you. Make sure to evaluate the company’s corporate culture, fiscal management policies, long term strategies, and other core values that need to fit your company’s value system for a healthy deal.
3- Heed the early warning signs. Remember that guy who checked out every woman who walked through the restaurant on your second date? Sure he was cute, but you knew better. I once witnessed a deal where the acquiring company had hit a wall with lack of growth and few new products in the pipeline. The SVP of sales and marketing had quit over the weekend never to return, the CEO was under intense pressure from the board to increase top line results, and the company was on an acquisition spree. Some of the targeted companies had noticed the warning signs but went ahead with the deals anyway. Needless to say, some of those deals went south in no time. Has the company you’re considering recently lost key employees, major customers or partners? Are they playing their cards too close to their chest? Are they having trouble refreshing their product line? Have they seriously reduced their marketing and advertising activities? May be time to step back and reevaluate the situation.
READ THE REST OF THE ARTICLE HERE: http://www.alisterpaine.com/mergers.html
