Delay is the enemy of progress in M&A deals

Time and focus away from a business costs dearly. No one wants a long, drawn-out process. Studies show a correlation between long, delayed transactions and post-merger performance.

Without major roadblocks, the legal side of most M&A transactions takes three months.

Here are some lessons I have learnt along the way.

Target a completion date

Setting a completion date and providing a deal timetable which is ambitious, but not impossible, is essential.

Considerations include: financial year end; budget announcements; regulatory changes; objectives set by a buyer’s board and dates for any investment committees. Know the parameters and plan accordingly.

Project Manager

Who is managing all the different advisers and the timetable?  Will a corporate finance adviser perform this role for you? If not, is there someone in the business with some experience or skill in this area?  Can they be brought in to help on this project?

Is everyone signed up and ready to go? Has the structure been settled?

Most transactions are structured to ensure optimal tax treatment for the sellers. We all understand that we need to be flexible, and solution focused, but instructing lawyers once key decisions on tax treatment and structure have been made will reduce delay and expense.

Good advisers will help you think through and navigate these issues early.

Locate the road blocks

On simpler transactions, always focus on the following as early as possible:

• Banking
• Employees, including any share schemes
• Foreign jurisdictions
• Shareholder groups
• Consents
• Property

Collaborative relationships

Everyone is trying to achieve the same aim and deliver the result the buyer and seller both want.

An early face to face group session can help understand the dynamics and personalities involved.

I once attended an opening dinner, to buck the trend of the closing dinner. Whilst this is a little extreme, some early meetings help with communication, which is essential to a successful M&A transaction.

Avoid an own goal

Be realistic about your own capacity. Avoid key holiday dates such as Christmas or 31 December and your own major life events such as moving house or operations.

Make sure the advisers you engage are well resourced and have completed the type or size of transaction that you are looking to achieve before.

Last year, pre-budget 2024, DMH Stallard completed a sale of a company in less than four weeks.

With the right team, aligned to work towards the same goal, it is possible to achieve what can feel like the impossible.

“DMH Stallard delivered an impeccable service in getting the legals completed in such a tight timeframe.”

Steve and Sandra Warr – Project Virgo

Our corporate team is here to guide you through the M&A transaction process.

For any queries or an early discussion, please contact Corporate Partner Kate Partridge by email or call on 07765 008788.