Top 5 Lessons Learned for Buyer Success in a Seller’s M&A Market

With low interest rates making debt cheap, corporate balance sheets with excess cash to exploit on inorganic growth and private equity buyers with record high amounts of dry powder, 2015 is shaping up to be another “white hot” M&A market. A year crowded with hungry buyers. From a supply perspective, valuations are passing pre-recession highs and thus owners realize now is the time to sell while corporations are going to market by divesting specific business units to take full advantage of this high pricing. While this active market sounds healthy, if you ask many buyers in the marketplace right now they will tell you – it has been tough to get deals done while staying disciplined.

When West Monroe Partners decided to supplement our 25%+ year over year organic growth with inorganic opportunities no one predicted how strong the current seller’s market would become. And while it might not seem like the ideal time for a business ramp up buy-side Corporate M&A activity, serial acquirers know that the best lessons are learned when the market gets tough.

As a Corporate M&A professional in the Professional Services space – I have experienced the great and the not so good across many transactions. When I couple my experience with our entire team – there are some best practices that we have embraced…and I wonder if others are seeing the same trends.

Over the next few months – our team will focus on the following topics and would love you to share any lessons learned as well:

  1. Culture can give you an edge that monetary rewards can’t – sometimes you win on money, but in a people based business, culture fit should reign supreme.
  2. When deals aren’t getting done, it gives you time to create a rigorous Acquisition Program – when you aren’t running hot you have time to take a step back, think about what went well and what didn’t and refine your process.
  3. When the assets are people, structure is as important as purchase price to deliver value to both parties – structure to benefit both the seller to capitalize on future growth, and the buyer to retain the assets purchased.
  4. Involve decision makers and influencers early and often – getting to the finish line when you finally have a deal to get done will be easier with the proper decision makers on board – time to educate is key.
  5. Stay disciplined and always work in good faith – sometimes the best deals could be the ones you don’t do.

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Phone: 312-602-4000
Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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