Transforming Existing Staff into M&A Experts

In the dynamic world of mergers and acquisitions (M&A), creating an effective team is crucial for success. This process can be complex and demanding, but also immensely rewarding. After all, having an internal team means having the capability of acquiring companies in the future, rather than treating M&A as one-time events. In this article, Birgitta Elfversson, Non-Executive Director at Netlight, shares her experience in transforming existing staff into M&A experts. 

“If you're only responsible for the transaction, you're not going to think about it so seriously. But if you're also responsible for the integration, you're never going to take a company that you don't want to integrate.” - Birgitta Elfversson

During her days at Unilever, they saw that health and wellbeing space underwent significant changes. It was a good opportunity for a new entrant. However, the companies gaining a disproportionate share of the growth in the supplement space, during these changes, had a business model very different from Unilever's.

Recognizing both its potential as an owner and its limitations in developing these businesses, Unilever adopted a buy-and-build strategy. The strategy focused on acquiring established companies at a strategic growth point, building its own platform rather than buying an existing one. This approach was about acquiring businesses and their models, not just brands.

The key to this strategy was the balance between ownership and integration. Unilever developed a method called “collaboration for the future,” which aimed to identify specific collaboration areas and synergies, tailored to each business's strengths and needs. 

Building an M&A team

Unilever’s strategy was to do programmatic M&A, which means they needed a continuous M&A capability. This required a dedicated team, and three key areas were focused on in team assembly:

1. End-to-End M&A Leadership: Team members needed to be capable of leading the entire M&A process, from strategy development through to integration, covering more than just due diligence and the transaction.

2. Deep Area of Expertise: Individuals were required to have significant expertise in a specific area. The philosophy was that leading a project credibly involves the ability to lead a workstream within it. 

3. Internal Networking: Team members were expected to effectively network within the organization, leveraging the knowledge and insights of Unilever's 150,000 colleagues on local markets, customers, supply chains, regulatory issues, and R&D.      

Recognizing the challenge of finding individuals with all three qualities, they focused on recruiting from within Unilever. Individuals with an existing network and deep expertise in a specific area were chosen, and a program was developed to teach them the M&A aspect. 

Scaling the M&A Team

Their M&A team started with three key people: Birgitta herself, their boss who worked part-time, and an expert in market strategies. During deals, they involved colleagues from other departments to handle the rest of the work streams. They additionally partnered with an external firm to support them where they needed more help.

Then, they began hiring project leaders. These project leaders were the same people who came in to support a work stream and decided to join the team full-time because they enjoyed the work. 

After their first project, they are ready to lead a work stream. After that, they progressed to supporting the overall project end-to-end and eventually to leading more independently. As they gained experience, they began coaching others too.

Managing burnout 

Burnout is a real issue in M&A due to its high-paced, intense nature. You often have little control over the timing and workload of ongoing processes. To avoid burnout, Birgitta implemented strict guidelines.

For the part-time resources, they called it the “coalition of the willing”. They only brought in people who were genuinely passionate about the work. This reduces the chance of burnout. 

For full-time resources, they ensured that team members didn’t run consecutive due diligences. They held standup meetings on a daily and weekly basis—15 minutes each morning and half an hour each week. These meetings were led by the most junior team member and focused solely on process, not content. Everyone discussed their priorities and ongoing tasks.

These meetings help team members find synergies between their work, shared knowledge, and identify others who have tackled similar challenges. This also led to reprioritization and reshuffling of work. They would ask who had too much or too little on their plate, and the team independently adjusted workloads.