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November 28, 2022

Auction processes in M&A are very challenging for strategic buyers. Aside from the inevitable price war, speed is necessary to compete in this environment. However, if done right, corporate development can effectively compete in an auction. This article will discuss how to run an accelerated deal process featuring Kirti Gavri, Head of Corporate Development for Wizeline.

"When you are a public company, sometimes speed is your differentiator." – Kirti Gavri

Standardized M&A Process

It takes more than a compelling offer to win in an auction process. According to Kirti, speed can be a differentiator, which can help edge out the competition. When running an accelerated M&A process, it's about standardizing the processes used in every deal. 

  1. Initial diligence request list
    Prepare the initial diligence request list ahead of time to avoid starting from scratch for every deal since they are always similar.
  1. Templates
    Prepare standard templates for every transaction, such as LOI, IOI, approval matrix, and trackers, allowing you to see the transaction's status at any given time. Also, document and templatize the standard operating procedures of every type of deal.
  1. Identify key stakeholders 

         Identifying the business sponsor and integration lead participating in the deal ahead of time significantly helps speed up the M&A process. It is also best to have a           standard M&A team. Have one person in every function to be the point of contact for every transaction, and let them assemble their own team. 

Initial Due Diligence

After signing the NDA, the deal team will now have enough information to formulate the deal's strategic rationale and potential synergies. Teams should draft the business case while performing initial due diligence. Doing both functions in parallel makes a massive impact on the timeline. 

Managing Red Flags

To manage red flags effectively in an accelerated process, have a regular daily cadence with critical stakeholders and cross-functional teams. This way, everyone will be aware of the red flags on the same day it was identified. 

Also, use a due diligence tracker. It should give everyone an overview of every work stream, who's leading it, and every identified risk. Then, during meetings, discuss the risks, so everyone understands how each risk will impact other work streams. 

Integration Planning

Always prioritize integration to ensure deal success. One of the best practices is to have a dedicated integration management office (IMO) that works closely with corporate development. The integration team should be involved in the diligence process to understand the deal better before corporate development moves on. 

As soon as the integration team gets involved, corporate development must help them understand the assumptions made to the target company and the deal's strategic rationale.

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