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February 21, 2024

In a highly competitive market, speed is crucial for companies wanting to do M&A. Especially with all the economic and market changes that’s happening, professionals must use M&A best practices to get better deals. In this article, Brent Baxter, Chief Executive Officer at Association for Corporate Growth, and Jeff Giles, VP, Corporate Development at Core & Main, share their strategies and experiences when executing successful M&A. 

“It’s important to have a clear lay of the land in both the core markets and the adjacent markets. You can’t find targets and develop relationships if you don’t know the companies that are relevant.” - Jeff Giles

Getting deals faster

What they’ve built at Core & Main is a proprietary process-driven approach to originating deals outside of a process. First, they’ve built out very comprehensive market maps. They spent a lot of time ensuring they have a comprehensive view of their core markets and adjacent markets, working in collaboration with the field leadership teams who are on the ground, competing with these companies, and familiar with these individuals.

Then, it comes down to building relationships over time. Transactions never happen without a relationship. It's rare to call a business owner or management team and they'll be immediately ready to sell their business. It's about being in the right place at the right time and building that relationship over time. 

Best practices when building relationships

Because they already did the work through market mapping, they know the companies that would be a good strategic and cultural fit.  To start building relationships, figure out the best way to make contact in a genuine manner. Then it's about keeping that contact, asking if it’s possible to reach out every six months or so. 

Reputation matters a lot. The goal is to establish the business as the acquirer of choice in the industry. It’s about building a great reputation in the industry, proving the company’s ability to execute transactions, integrate companies, and create opportunities for all the people who join through acquisition. 

Also, don't discount the bar or other casual conversations. Network is invaluable, and you never know where that next investment will come from.

Executing agile and efficient diligence

For efficiency, establish a very formalized process for how the company is going to go about sourcing through integration. Jeff makes sure they are focused on teasing out the key risks in the acquisition or the due diligence process. Sometimes teams can get caught up in checklists and lose sight of the bigger picture. The key is to step back and remember the deal thesis.

After they close the deal, their next focus is the acquired employees. There's always anxiety in any acquisition, so their goal is to ease people’s anxiety and make them feel good about becoming a part of the acquiring company.

Role of technology in the M&A process

Technology is a great tool to improve M&A efficiency. At Core & Main, they tried a lot of tools, but eventually found DealRoom that fits their needs. They use it daily for reporting both internally to the board and managing the diligence process within each deal card. It tracks all of their requests and document management, making them very efficient. All the information is in one place, and it's user-friendly with a small learning curve.

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