Successfully navigating a merger or acquisition in the tech industry demands a well-crafted business exit strategy. Key insights from industry leaders offer guidance on managing this complex process effectively.
- Experts emphasise the importance of maintaining objectivity during the due diligence stage to prevent emotional decisions.
- Early identification and understanding of potential buyers are crucial to aligning business goals and avoiding missteps.
- Having contingency plans is recommended to safeguard against unforeseen disruptions in the M&A process.
- Post-deal momentum is essential to ensure the long-term success and integration of the merged entities.
In the intricate arena of mergers and acquisitions (M&A), maintaining a clear-headed approach is vital, especially during the due diligence phase. As corporate finance adviser Nick Thompson from Moore Kingston Smith points out, “always due diligence problems – don’t get offended by them.” Here, the potential for emotional entanglement is high as this stage often involves rigorous scrutiny of the company’s inner workings and financials. Leaders are advised to remain objective and cooperative to facilitate a smoother process, avoiding actions that might suggest deeper, unresolved issues.
Identifying and understanding potential buyers early in the M&A process is of paramount importance, as noted by Mark Simons, managing director of Prime Networks. He advises, “Establish who your buyers are and get to know them early before you start the process.” This strategic approach not only helps in refining the exit plan but also in performing vendor due diligence to pre-emptively identify and resolve issues within the company. Moreover, Simons highlights the value of engaging advisors to bridge knowledge gaps, stating, “We’re acutely aware that we don’t know what we don’t know.”
A robust M&A strategy should always include a contingency plan, as disruptions are not uncommon. Dominic Ward, CEO of Verne, underscores this necessity by sharing his experience of a deal falling apart unexpectedly. “It happens a lot,” he reveals, advocating for maintaining good relations with multiple potential partners as a safety net. His guidance is clear: having a plan B is essential to adapt swiftly to unexpected developments in the M&A journey.
Finally, sustaining momentum following the conclusion of an M&A is crucial, according to Ruth Collett, CMO at The Adaptavist Group. She cautions against losing focus once the deal is signed, stressing the importance of continuous integration efforts related to personnel, technology, and organisational culture. “Keep the momentum going after the deal has closed,” she advises, reminding leaders to stay aligned with the original vision that drove the merger or acquisition in the first place.
These expert insights collectively reinforce the critical components of a successful tech business exit strategy during M&A.
