The perfect M&A deal

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Tim Hardman on the perfect M&A deal

Tim Hardman, managing director of Avondale, offers his recipe for the perfect mergers and acquisitions (M&A) deal

Cooking programmes have become a national obsession. They show us how to achieve delicious and attractive food. Following a recipe takes time, the right ingredients and knowing what the final dish is supposed to look and taste like. Being a great chef and creating a recipe takes culinary wizardry; knowing when and how to combine flavours, textures, colours and using the best tools to create the perfect dish.

This is exactly the same for successful M&A projects. A great M&A adviser needs to have the technical skills and a proven track record to create the optimum environment, to drive deal value and time each stage precisely, to create the perfect deal. A recipe is a process; its success is dependent on the chef. Only someone that understands the art of deal-making is able to add creative flair, leading, anticipating and negotiating proactively, to ensure that this process is tailored to ensure maximum success and deliver the perfect M&A deal.

Exceptional deal-making doesn’t happen by accident. It takes business acumen, experience, skill, patience, devotion and boldness.

What makes a great M&A adviser?

To create the perfect M&A deal, certain tools and skills are a pre-requisite. Your M&A adviser will need to have a proven track record that provides expert experience. In-depth business acumen is a must to position the business to achieve maximum value. The ability to understand buyer and seller motivation will form an essential ingredient in crucial negotiations to drive sale value. Understanding the technical, legal, tax and associated elements is essential. Project management skills to lead the entire deal to successful completion are of equal importance.

Recipe for the perfect M&A deal
Preparation. First approach the recipe by investing time to design the project and agree the desired outcome. Add a good pinch of business acumen to ensure that maximum value is achieved. This may involve significant time and strategy advice before going to market. Time needs to be spent ensuring a full understanding of the business, to not only position it in the best light, but to also save time and prevent risks later in the process.

Blending the ingredients. The next step involves in-depth research to identify and approach the most suitable potential buyers and sellers. Ensure you fully understand their position and motivation. Leverage this to create a competitive environment, to drive deal value and structure. At this stage offers will be submitted. You are looking to create a perfect marriage of buyer and seller and select the closest matching offer accordingly.

The final touches. Negotiating the required deal takes an enormous amount of skill and strategy. You need to know when to add the right amount of spice to heat things up and when to leave your dish to bubble away quietly. Your technical skills will come into play here ensuring that the deal structure takes account of tax considerations, for example. Timing is also critical at this stage. So much time has been invested in the creation of this Perfect M&A dish that it is possible to overlook the initial objectives and rush to get the dish served.

Serving. The perfect M&A deal should be served to the client, meeting, if not exceeding, their objectives while minimising their involvement, ensuring they are left with pure enjoyment.

The perfect M&A deal needs to be delivered first-time, at the right time, at the right price, with the right structure ensuring the client’s objectives are met if not exceeded. It takes experience, patience, devotion and boldness to become a great chef capable of building a reputation of first-class delivery.

Avondale are the IoD’s preferred provider and offer IoD members discounts on Mergers and Acquisition Services. To find out how Avondale can help you call 01737 234892, email Avondale or visit iod.com/buyandsell

Want to learn more about exit strategies? On 14 May Avondale will sponsor a conference at 116 Pall Mall on the subject. Experts will share advice on which strategy best suits your company. Tickets to the event, taking place from 9am to 5pm, cost £360 (plus VAT) for members.
iod.com/exitstrategies

Get advice and guidance on buying and selling a private business at a conference, sponsored by Avondale, on 17 November at 116 Pall Mall. It takes place from 9am to 5pm and tickets cost £360 (plus VAT) for members.
iod.com/buyingandselling

About author

Tim Hardman

Tim Hardman

From a financial services background, Tim joined Avondale in 1994. Since then he has helped develop Avondale into a leading, award-winning, business sales, mergers and acquisitions practice, with the highest success rate of any firm in the market. He has also been instrumental in driving innovation including establishing the Value Builder programme which helps business owners to drive sustainable shareholder value through both acquisitions and organic growth. With over 18 years M&A experience, Tim’s core focus remains client facing and he has advised on and managed over 150 successful transactions on behalf of clients.

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