Deal Success Hinges on What Comes Next

Hey, it’s David

At BoardSpire, we're diving deep into the latest trends and strategies to help you stay ahead in business growth and acquisitions.

In this newsletter, content from the world of private equity, M&A and business growth all hand-picked to keep you informed.

• How enterprise value translates into real deal cash

• From looking at the risk/reward of dividends to staying private or going IPO, we take a deeper look at PE this week

• M&A From the Plane…  M&A headaches - Even the most exciting mergers can unravel quickly, unless you master the post-close chaos.

• And more…

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My Favorite Finds This Week

Investment Banks, Accounting, Legal & M&A Advisors

• Enterprise Value vs. Equity Value in M&A: How enterprise value translates into real deal cash. (IMAA Institute)

• M&A Financing Insights from Gary Grote: Navigating M&A: Precision, Patience, and Capital Dynamics. (JD Supra)

• The Board’s Role in M&A: Guidance on how board members influence the success of M&A transactions. (IMAA Institute)

Private Equity & Financing

• Apollo Private Equity AUM to Double to Almost $270 Billion: Positioned for growth in huge markets over next 5 years ( BuyoutsInsider )

• Dividend Recaps: Reward or Risk: Will PE’s debt strategy boost returns or spark trouble ahead?(Pitchbook)

• Alphabet’s CapitalG Bets on Advisers: Will tech-driven trust reshape wealth management? (MiddleMarket)

• KKR vs. DOJ; Accountability Showdown: Will executive liability reshape private equity’s future? (PrivateEquitywire)

• Stay Private or Go IPO: Can profitability reshape public market success? (Foley & Lardner LLP)

• How Deal Volume Informs Value: Examining the correlation between deal volume and the valuation of companies. (MiddleMarketGrowth)

Business Growth

• Simple Ways to Boost Your Sales: Quick, actionable strategies to increase sales performance effectively. (Solve to Scale)

• Sales Lessons from Brad Pitt and Morgan Freeman on LinkedIn: A unique take on LinkedIn sales strategies inspired by famous movie characters. (Richard van der Blom)

• How to Create Any LinkedIn Post in Under 5 Minutes: A quick guide to crafting LinkedIn posts efficiently. (Andrew Jaindl)

• How to Sabotage Your LinkedIn Profile: Common LinkedIn profile mistakes that hinder personal branding and networking efforts. (Ruben Hassid)

M&A Integration - Why Post-Close Challenges Derail Even The Best-Laid Plans

…I truly thought this would be a relaxing flight. 

One of the topics I’m most often asked about is why so many M&A deals do not work according to plan. I have never been involved in a deal where both sides were initially not excited at the prospects of what the merger would bring.

The Buyer is eager to grow, gain new customers, or enter new markets.

The Seller is equally excited at the prospects of newfound wealth, new growth opportunities for their employees, and the chance to be part of a larger, growing organization.
 
Sadly, however, most M&A deals don’t work out post-close.

There are probably as many reasons why deals don’t work out as there are deals. But most research on failed mergers points to a handful of key attributes. Thus, look at some of the most critical catalysts for M&A failure.
 
In today’s post, I will focus on time. I am not referring to the time it takes to get a deal done; instead, I am referring to the time it takes to make a merger work due to all the post-close changes after all the paperwork is signed. 
 
Successfully managing organizational change is challenging even under ideal conditions. The complexity intensifies when two organizations must integrate distinct processes, policies, priorities, technologies, and teams within a tight timeframe.

Key areas to consider during M&A integrations:

1. Lack of centralized ownership or accountability
   Decentralized management may work well for certain projects, but it often leads to failure in mergers and acquisitions (M&A). Many organizations plan for departments to handle their respective areas; IT for technology, HR for people and policy, finance for reconciling books without a unified leadership structure.
   
   This fragmented approach typically fails due to:

   • Competing priorities across teams

   • Lack of alignment or cohesion

   • Absence of a clear integration roadmap

Without centralized leadership and accountability, these efforts are often doomed from the start.

2. Ineffective communication
   Communication is critical during M&A, yet many organizations approach it with a "check-the-box" mentality. They assume that announcing the M&A is sufficient.

   
   However, the common pitfalls include:

   • Sharing incomplete or incorrect information

   • Delays in communication

   • Failing to continuously reinforce the impact on people and their roles

The breakdown in communication often stems from two major issues:

1. Leadership underestimates the anxiety and uncertainty caused by the M&A

2. Leadership sends mixed signals by saying one thing but doing another

This disconnect tends to result in a disengaged, demoralized workforce, uncertain of their future, which is hardly conducive to a successful integration.

Ultimately, the success of any merger lies not just in the deal itself but in the ability to align people, processes, and priorities long after the ink has dried.

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David