M&A is a massive undertaking that calls for collaboration among numerous individuals. Ensuring alignment with everyone involved is essential for the success of a deal. Yet, with a variety of opinions and personalities at play, achieving alignment can be quite a challenge. In this article, Andrew Bilbao, CFO of Noble Education Acquisition Corp, shares valuable insights on how to guarantee alignment for deal success, paving the way for a smooth and fruitful M&A process.
“The hardest part of achieving alignment is being objective and not allowing your personal feelings to get involved in any given transaction.” - Andrew Bilbao
Alignment with the overall acquisition strategy is arguably the most important thing everyone involved must understand. It drives the entire acquisition process and the integration planning, so alignment is paramount.
1. Develop a Clear Strategy
According to Andrew, a clear strategy is the cornerstone of any successful corporate development program. The strategy must be aligned with key stakeholders. If the transaction is going to affect the entire corporation, then executive leadership and the board of directors must be involved. If it’s a divisional strategy, then alignment with business unit leaders will suffice.
2. Onboard the Unit Lead
Ensure the division lead or CEO is on board with the prospective deal and timeline associated with it. They must understand the M&A process and get them to assign people from their team to be involved in the process.
3. Keep the Small Team
Keep the initial group of stakeholders involved in the process relatively small to avoid getting too many people excited about a transaction that may not go anywhere.
4. Get Buy-in From Executive Leadership
Upon identifying an opportunity, discuss it with the leadership team to secure buy-in at the executive level. Consider resources, both financial and human, and prioritize deals based on feasibility and alignment with the company's goals. Obtain a green light from decision-makers, such as the CEO, divisional lead, or investment board, to ensure all parties are on the same page before pursuing a deal.
Involving functional leads early on in the process is crucial as they can provide valuable perspectives and opinions. However, it might not make sense to involve them pre-LOI. Keep them informed if a deal is about to happen to avoid surprises. Asking them if they need to be involved at that stage might also be beneficial for special circumstances. Communication and transparency between corporate development and functional leads are key.
Also, the functional leads are a crucial part of integration planning that must start during diligence to ensure alignment with the strategy. Everything must be ready as soon as the deal closes.
Achieving alignment can be challenging when dealing with different personalities and viewpoints, but it's important to remain objective and focus on broader goals and shareholder value. Transparency and openness to different perspectives can help overcome challenges and keep the ultimate goal in sight, ensuring that the integration plan stays on track and achieves the desired outcomes.