How to Perform Mergers and Acquisitions at Lightning Speed

Doing things right often takes time. But sometimes things need to be done right and done quickly–which can be a tall order. When it comes to selling a …

Doing things right often takes time. But sometimes things need to be done right and done quickly–which can be a tall order. When it comes to selling a business, the amount of control in how quickly a transaction is completed from beginning to end is a hurdle-laden path. In some cases, getting a deal done at all is a complete miracle, let alone getting it done quickly. But occasionally, the stars do align and deals get done on the quick. Barring external issues outside the control of management and the M&A advisor, there are a number of key considerations in ensuring a deal gets done at lightning speed.

Wait, Not So Fast…

A current client we represent made it very clear during our initial engagement meeting his intent to get a deal done in under five months. Our first question was, “why are you in such a hurry?” Their business is a cash machine for the three owners who’re all in their early forties. On the surface, selling the company did not appear to be the right strategy–at least on the surface.

After further discussion, we learned that both owners were suffering health-wise due to the amount of time they were putting into the business. Moreover, the owners were also spending very little time with family–something they were beginning to regret. The desire to sell had reached a tipping point months previous and nothing had been done. Now the need loomed even larger than ever.  

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Speed forced unnecessarily is almost never ideal. If necessary, all owners must consider the trade-offs and implications of forcing a deal.

The Cost, Quality, Speed, Safety Trade-off

In construction, OSHA enforcers often speak of the cost, quality, speed, safety paradox. That is, if you want something done fast, you may need to sacrifice on at least one of the other three to get there. Furthermore, the trade-off may have collateral consequences which may prove painful including, but not limited to, lower valuations, less power in negotiations and more stringent due diligence. There are some ways to help assuage some of the risk, however.

First, performing M&A appropriately requires proper prior planning. And, as the saying goes, proper prior planning prevents piss poor performance. If possible, prepare to sell long before the need outweighs the desire to maximize payout. This will ensure decisions are not made in rash speed. If done strategically, it also can mean a cash payout much larger than previously anticipated. Where possible, try to squeeze some very concentrated planning sessions in with an advisor to ensure cohesiveness and strategy alignment.

Second, speed is best accomplished through experience and existing network relationships. If a firm has already done deals in a particular market sector, knows the multiples, knows who the key players are and the contacts within the companies he/she needs to reach out to, it will make any deal go more smoothly. In the case of a seller looking for a rushed close, it is most certainly a must have. Having the database and the precise contacts will ensure a more rapid close from start to finish.

Third, be careful in telling potential buyers about a high urgency in the close. This may fall into the “safety” category. While the seller may be looking to get a deal done quickly, a fine line must be tread with potential buyers in sharing such information. The desire to move quickly may come across as a major red flag. Seller beware.

We certainly never advocating a specific price because our strategic M&A process includes a stringent adherence working through an “auction.” When speed is truly an issue, the seller may feel pressure to capitulate on price just to get a deal done. Some might force the seller to “pick a number” and advisor will get you that number and no more. When working on a lighting quick transaction, it still important to ensure the price of the business is not sacrificed in the name of speed. When done right, deals can be done quickly. The question is, what are you willing to sacrifice to get there faster than normal?


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