The business acquisition manager role within a company is a privileged one; the role, which sometimes overlaps with that of the corporate development officer, involves finding suitable target businesses for their company to acquire, and managing the process from initial contact right through to change management and integration.
We at DealRoom deal with many M&A managers and in this article, we delve a little further into the position, the skills it requires and what good business acquisition managers bring to a company.
Why do companies hire business acquisition managers?
The answer to this is simple: Because the task of acquiring companies is simply too important to leave to a non-specialist. The individual charged with this task has to know
- what they’re looking for,
- why they’re looking for it (without a good answer to ‘why’, there’s no point in continuing with a deal),
- where to find it and how much to pay for it.
And usually there’s only one person that fits this bill: a business acquisition manager.
As a general rule, the more acquisitions a company plans to undertake, the most important a role the business acquisition manager plays within the company.
While thousands of micro enterprises make acquisitions every year, it’s usually more opportunistic (e.g. they hire a local competitor) than systematic.
The appointment of a Business Acquisition Manager, on the other hand, is more a signal of intent by a company owner that M&A has become part of the company’s growth strategy.
Of course, they’ll have some say in how active their company should be in M&A (although, the CEO or the board of directors will have the final say) and a good acquisition manager won’t just acquire for the sake of acquiring: they’ll only advise the company to buy when something suitable becomes available.
This can mean a lot of time identifying companies and familiarizing themselves with the market without ‘pulling the trigger.’
What does a business acquisition manager do?
Most of a business acquisition manager’s time is occupied by familiarizing themselves with the market.
This means talking to investment bankers about companies currently available and letting the bankers know what kind of companies they’re interested in acquiring.
This also helps to build the network of the business acquisition manager, which is extremely important in the M&A industry - someone who isn’t necessarily important to know right now could become the person selling a company which is a perfect fit for your company two years from now.
This feedback from the market will then be reported to management in regular meetings, who use the information in their own decision making.
For example, if quarterly revenue indicates that the company’s European sales are performing far stronger than sales in North America, management might consider an acquisition of some form in Europe to better capitalize on these trends.
They would typically then turn to the business acquisition manager asking them about what’s available in Europe, or alternatively, to begin a European company search.
When the business acquisition manager has identified some suitable targets, they would report back to management about their findings.
In the case that management wants to pursue the opportunities, meetings (virtual and physical) occur with the brokers and the target companies, where more information is gleaned about the target company and both sides determine if a transaction makes sense.
As you may have guessed, the business acquisition manager becomes much more engaged during the acquisition process.
They’ll be involved at every stage of the discussions, both internal and those with the client. Their opinion, formed having looked at hundreds of companies in the market over several months, is a valuable asset to management discussion.
Even when management thinks a deal is good, the experience of the business acquisition manager might tell him or her otherwise.
If the merger or acquisition is agreed to by both sides, the acquisition manager will typically be involved in the high level details of the purchase agreement and begin to prepare both companies for the post-transaction phase.
This involves integration and change management.
The level of involvement in these processes will depend on the company but it’s safe to assume that the business acquisition manager will participate to some degree in both.
Which skills should a business acquisition manager possess?
The catch-all answer to this question is ‘commercial acumen.’
The business acquisition manager has to have a good instinct for what will work and what won’t.
Having a good understanding of this will allow them to make better estimations of the true value of the companies being acquired and where they fit in with the buyer.
Commercial acumen will also enable the manager to see the bigger picture and avoid many of the fads that come and go in different industries.
More specifically, acquisition managers are typically adept at
- financial modelling,
- have a good understanding of financial terms and concepts,
- an excellent understanding of the industry they operate in (usually this can be learned on the job but it’s an asset for those applying for manager jobs if they possess the knowledge already),
- and the ability to communicate well, both personally and through presentations (industry presentations are a common task).
While most business acquisition managers have some form of business background, this isn’t a necessity. In fact, depending on how specialized the industry is, the more an understanding is required of how the business operates.
The varied nature of the business acquisition manager role means that, in general, there’s nothing to stop people from different backgrounds entering – much like a management consultant position – but some understanding of finance combined with commercial acumen is indispensable.
What about salaries?
The responsibility attached to the business acquisition manager role means that it is invariably paid well.
In most companies that have a business acquisition manager, the pay tends to be broadly in line with the upper end of middle management.
Some companies may offer bonuses for acquisitions. Like any bonus, this is intended as a motivator but doubles up as a way to keep a ceiling on the salaries of managers, who otherwise aren’t adding immediate value to the company.
Check average salaries here:
The description of the business acquisition manager provided in this article only provides a broad outline of what the role may entail.
The valuable skills that these individuals bring to a company means that they’re often called into other areas such as project evaluation and internal audits.
However, the central task of the Business Acquisition Manager will always be to identify suitable acquisition targets and oversee the M&A process to its conclusion.