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How to Incorporate Successful Project Management Into Your Next M&A Deal

Kison Patel
CEO and Founder of DealRoom
Kison Patel

Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.

CEO and Founder of DealRoom

Mergers and acquisitions (M&A) are perhaps one of the most complex, information-dense and unpredictable processes within the finance industry.

M&A deals require an incredible amount of planning, organization, communication and insight.

Therefor, it is very important that deal teams have the proper technology and tools to aid in the process.

Before defining software for m&a project management, we should look at the meaning of M&A project and project management.

What is M&A Project?

The meaning of an M&A project is simple. An M&A project includes any activities necessary to execute an M&A transaction, and due to the complexities of these types of transactions, there are many different steps involved in M&A projects.

If the various M&A projects surrounding a deal are effectively management, the higher chance of deal success. However, failure to properly plan M&A projects can also lead to deal failure.When beginning an M&A project, there are three different areas to consider: the project structure, the team, and specific task roles.

Each project is unique, so these three areas can’t be duplicated project to project. Also, instead of lumping an entire deal into one M&A project, create separate projects, as well as sub-projects, and determine priority. This helps make your processes Agile and the most effective.

What is M&A Management?

M&A management of projects is the planning, organizing, and managing the effort to accomplish a successful M&A deal. Project management enables teams to have cross-functional collaboration, and delegation.

Over the last decade, many improvements have been made to technology enabling more efficient and collaborative project management. These technological advancements have made their way into many industries. However, deal teams seem to still be managing complex, ever-changing M&A the same they did 20 years ago.

That's where M&A project management software can play an important and modernizing role.

What is Project Management Software for M&A?

Project or deal management software for M&A is software designed to manage and organize multiple M&A deals throughout the transactions’ entirety. The features included software are built with M&A in mind. For example, platforms include pipeline management because teams are often managing more than one transaction at a time.

M&A project management roadmap

The Importance of M&A Project Management

In any deal there are a lot of necessary steps to take. Whether buy-side, sell-side, investment management M&A, asset management M&A, or even if it involves an investment bank, private equity firm, or corporate development business, the necessary workflows are intricate.

Many hands are involved in each deal, confidential information is shared, and hard decisions are made.

During the deal, it is important for the deal team to know exactly what stage these processes are in, while also being able to see the big picture and end goals.

m&a project management software

Until recently, the M&A due diligence process required long email threads, virtual data rooms, Excel trackers, and other tedious forms of m&a project organization and communication. But not anymore.

After decades of managing deals with outmoded forms of technology and practices, project and deal management software has finally made its way to the M&A industry. M&A management teams are now able to centralize communication, organize workflow, and track progress on one platform.

Why Should You Use M&A Project Management Software?

If you didn’t know how powerful project management software is already, here’s why you should start utilizing them right now.

M&A project management and deal management software eliminates the tedious practices analysts and associates often engage in when performing deals, such as:

  • Organizing diligence documents on Excel trackers
  • Shifting through long email threads in order to communicate with buyers and clients
  • Using multiple platforms to store and share data

Instead, M&A project management software provides advantageous benefits such as:

Workflow Delegation

  • M&A project management software ensures that everyone is aware of their own individual responsibilities, when someone else is spearheading a task, and where additional help is needed. This prevents gaps in the workflow and duplicate work, and encourages collaboration when needed.

Secure File and Document Sharing

  • Finally be able to upload files, share documents, and have organized dialogue all in one secure place. M&A software tools provides a one-stop-shop to share and transfer files and documents in a safe way. It also enables quick feedback.

Internal and Deal Management

  • You can manage internal work, as well as multiple deals at a time. For example, pipeline features keep each deal separate and organized. Each deal can have its own separate room, where teams can create a staging folder, complete due diligence, fulfil buyer requests, store data, and anything else you need to do during the deal’s lifecycle.
M&A project management benefits

However, M&A project management can help complete due diligence up to 40% faster.

One of the more difficult problems faced during due diligence is that deal teams are forced to use softwares and online m&a platforms that are not well designed for aspects of M&A.

For example, virtual data rooms are a great place to collect, host, and share files and documents.

virtual data room

However, that is where data room capabilities end.

Team members must therefore use other platforms to complete diligence. This adds to the places in which work is being done and further dilutes communications and task management.

If that seems illogical, it’s because it is.

That’s why, M&A needs a project and property management software designed specifically to conduct all aspects of a deal.

M&A management software
Software designed for M&A provides a central location to manage resources, tasks, requests, deadlines, projects, and communication in M&A projects.

Updates are made in real-time, allowing you to share the most up-to-date information. Since all the information is centralized, users can run detailed analytic reports that track deal progression, gage buyer interest and aid integration. Such platforms also enable deal teams to identify bottlenecks early, giving users a competitive advantage.

Asset management M&A software, like DealRoom, also saves users thousands of dollars. Instead of paying per page for necessary data room functions, M&A project management software includes a secure data room for all your documents, and only charges a flat-rate.

M&A Project Management Tools

Any company that is developing its M&A project management capabilities would be foolhardy to do so without technology. There are a growing array of capable software solutions that can help companies to navigate their M&A journey more efficiently.

DealRoom has been developed for the M&A community, having consulted with some of the world’s most prolific dealmakers. Its package includes:

1. Pipeline management

DealRoom’s Pipeline Management Tool was developed in collaboration with M&A project managers. Teams can access all of the deals in their pipeline using the tool’s deals dashboard.

The strength of the Pipeline Management tool is that it gives M&A practitioners an overview of all their M&A activity and how each deal relates to the others, rather than treating each deal separately.

M&A pipeline management tool

2. Due Diligence management

We understand the importance of a strong due diligence process for successful transactions. We have worked with hundreds of M&A practitioners to develop what we believe is the most comprehensive suite of tools on the market for due diligence.

Diligence teams gain access to extremely detailed checklists and industry-specific guidelines, that give them confidence in their due diligence process. The DealRoom diligence tool also allows fast and easy communication between deal participants, including the tool’s unique request function, where new documents or information can be requested using an easy-to-use template.

due diligence management tool

3. Integration management

In many ways, the hard work for deal participants begins when the transaction closes.

DealRoom’s Integration Management empowers users to take control of the process even before deal closing. It divides the process into a series of workflows and timelines, ensuring that every component of the post-merger integration is addressed as efficiently as possible.

Taking all three tools together, DealRoom provides its users with a fully integrated M&A project management platform that provides a roadmap from deal origination all the way through to a comprehensive integration of the target company.

M&A integration management tool

How to Successfully Manage Your M&A Activities?

In order to successfully manage M&A activities, teams need to be equipped with the right tools. They need to use a platform specially designed for M&A. One that allows every aspect of the deal, from sourcing, all the way to integration, to be managed in one spot.

M&A project management software is bringing M&A processes into the 21st century.

M&A deal management software includes the tools and techniques required to complete a deals more efficiently, more timely and more successfully. The software is designed specifically to fix the inefficiencies commonly seen in due diligence and throughout a deal’s lifecycle.

Asset Management M&A Software includes the following features:

  • File Sharing & Data Export
  • Drag-and-Drop Upload
  • Custom Permissions
  • Full Text Search
  • Real Time Analytics & Custom Reporting
  • Requests and Task Management, Request Import
  • Visual Request Lists & Progress Tracking
  • Live-Link Documents & Labels
  • Notifications & Comment Capability
  • Trend Analysis and Forecasting
  • Follows an Agile Methodology
  • Assignee and Reviewer Options
  • Virtual Data Room

The list above is not just a list of fancy features. This is a list of new techniques that are changing the way diligence management is approached and managed. The techniques above are allowing deal teams to close deals 40% faster,  they transform the way common tasks are approached, and are bringing deal management and procedure into the 21st century.

A key aspect of these techniques is a method called Agile. Traditionally, deal teams use a waterfall approach to deal management, a strict, linear method. However, Agile principles are much better suited to M&A deals’ unpredictable nature.

The Agile M&A Approach

The Agile approach takes advantage of parallel, asynchronous workflows to allow m&a project teams to work in small increments, optimizing the completion of individual tasks while minimizing wait times between the tasks themselves.

Agile M&A management approach

However, in order to properly utilize Agile, deal teams must implement project management softwares that provide transparency, centralized communications and organize priorities. The days of organizing and tracking critical information on Excel and communicating with clients, buyers and internal team members over long email chains must end.

How M&A Management Software Benefits Every Deal Stage

Stage #1 - Due Diligence

The quickest way to start using project management software for due diligence, is by importing a pre-made request template. By importing a pre-made template, the data room and folder structure is automatically populated and organized. From there, users can start fulfilling requests using drag and drop upload. They can also assign task roles, communicate with other users, and invite new users to the room.

When teams use M&A project management software for due diligence, over traditional data rooms, it allows them to assign roles. For example, investment banks can assign the analyst, associate, and vice president on a deal to their specific roles. They can also request documents, files, and information from their clients and additional third parties.

Stage #2 - Integration

During diligence, teams gather and collect every little detail about the company. Information collected during diligence, that is crucial for a successful integration, can be accessed after the deal is complete. The knowledge transfer allows everyone to see the big picture early on. Teams can plan for post-merger integration early by having real-time visibility to enable strategic problem solving and identify synergies. This helps teams with visioning, shaping, and transforming, all crucial to a successful PMI process.

Stage #3 - Internal Management

Not only is deal management important, but so is internal management. And at the end of the day, the more efficient your internal process is, the more effective your company can be to its end users. With project management, teams can store, access, and share internal documents and tasks. They can also use project management software to assign roles and set deadlines, allowing for visibility and accountability.

Stage #4 - Pipeline management

M&A project management software can be used for different stages of the deal, such as sourcing, or even just pipeline management. The goal is to keep teams organized for internal and external processes. Pipeline management allows deal teams to track multiple deals in a visually simple and easy-to-navigate way. Pipelines are typically displayed in dashboard form and include deal specifics for varying stages, all on one page.

What Does an M&A Project Management Manager Do?

M&A Project Managers oversee M&A transactions from start to finish. This means that their responsibility begins at target identification and concludes at the post-merger integration (PMI) phase.

At each step of the transaction, they are expected to coordinate everything from internal responsibilities, hiring from outside, and the company’s interactions with the target company stakeholders.

Experienced M&A Project Managers generally have a method of working that provides them with a rough idea of how long each step of the process will take and what resources will be required.

M&A project manager responsibilities

M&A Project Managers are thus expected to ‘wear several hats at once’. Major capabilities of M&A project manager that will be required include:

  • Leadership: It’s not difficult to see how being the manager of a project that could dictate the success of the company for several years to come requires solid leadership skills. With at least two companies involved in any M&A transaction, a significant part of the success of any deal is managing people.
  • Communication: Closely related to leadership, the M&A project management process involves so many different stakeholders from both companies, that its success is pinned on good communication.  Good M&A project management software (insert link) can aid this.
  • Cost Management: M&A transactions can become expensive exercises in themselves, even before the deals are closed. An essential task of any M&A project manager is to ensure that costs are kept under control, and that maximum output is achieved from as few resources as possible.
  • Quality Management: With so many moving parts to a transaction, it is easy to compromise quality for elements of the transaction which appear less important. The M&A project manager’s role is to ensure maximum quality at every stage, ensuring the deal generates as much value as possible.
  • Planning: Closely related to quality management and cost management skills, are the M&A project manager’s planning skills. This means knowing how much resources to dedicate to each stage of the project, how long these projects should take, and what the contingencies are likely to be.
  • Information Management: The information generated by any M&A transaction has the potential to become overwhelming if not management properly. M&A Project Managers would be well advised to leverage good virtual data room providers to help them to avoid information overload.
Useful resources:
Developing Leadership In M&A
Tone at the Top - Intersection of Leadership and Culture in M&A
The Role Of Leadership In Mergers & Acquisitions

Implementing a Phase-Gate Process in M&A

Many M&A Project Managers implement a phase-gate process to get deals over the line.

Each stage of a well conducted M&A project should have an objective (or objectives) that need to be met before moving onto the next. These can be broken into overarching objectives - which tend to be the case when drawing up a long list - and micro objectives, where more detailed, careful assessment is required.

A well designed phase-gate process is composed of each of the following stages:

1. Strategy Approval Stage

The M&A project manager works with the company’s corporate development officer, strategy manager, or vice-president, to set the criteria for potential acquisition targets.

In the phase-gate process, only those companies that meet these criteria can be considered. Other issues to be considered at this stage include the likelihood of the target company owners being open to a deal, and how compatible the target company’s culture is with your own.

2. Intermediate Stage

The intermediate stage, sometimes referred to as the approval-to-negotiate phase, encompasses a full valuation of the target company, all of the due diligence phases (each governed by their own individual phase-gate processes), and even some issues around the post-transaction integration.

Ultimately, the output from this phase is a non binding letter of intent, a clear roadmap for how the company approaches negotiations with the target, and an outline of confirmatory due diligence.

3. Deal Approval Stage

The deal approval stage is essentially a continuation of the intermediate stage, with most of the remaining issues (confirmatory due diligence), approval from the board of directors, regulatory clearance, and post- due diligence valuations.

At this stage, there are no new issues to raise, but it does provide everyone with a good opportunity to speak up if they believe, for whatever reason, that a transaction should not go ahead.

Talk to us today about how our M&A Project Management solution can turbocharge your M&A experience.

Useful Links

What is M&A? - The Complete Overview

dealroom

Mergers and acquisitions (M&A) are perhaps one of the most complex, information-dense and unpredictable processes within the finance industry.

M&A deals require an incredible amount of planning, organization, communication and insight.

Therefor, it is very important that deal teams have the proper technology and tools to aid in the process.

Before defining software for m&a project management, we should look at the meaning of M&A project and project management.

What is M&A Project?

The meaning of an M&A project is simple. An M&A project includes any activities necessary to execute an M&A transaction, and due to the complexities of these types of transactions, there are many different steps involved in M&A projects.

If the various M&A projects surrounding a deal are effectively management, the higher chance of deal success. However, failure to properly plan M&A projects can also lead to deal failure.When beginning an M&A project, there are three different areas to consider: the project structure, the team, and specific task roles.

Each project is unique, so these three areas can’t be duplicated project to project. Also, instead of lumping an entire deal into one M&A project, create separate projects, as well as sub-projects, and determine priority. This helps make your processes Agile and the most effective.

What is M&A Management?

M&A management of projects is the planning, organizing, and managing the effort to accomplish a successful M&A deal. Project management enables teams to have cross-functional collaboration, and delegation.

Over the last decade, many improvements have been made to technology enabling more efficient and collaborative project management. These technological advancements have made their way into many industries. However, deal teams seem to still be managing complex, ever-changing M&A the same they did 20 years ago.

That's where M&A project management software can play an important and modernizing role.

What is Project Management Software for M&A?

Project or deal management software for M&A is software designed to manage and organize multiple M&A deals throughout the transactions’ entirety. The features included software are built with M&A in mind. For example, platforms include pipeline management because teams are often managing more than one transaction at a time.

M&A project management roadmap

The Importance of M&A Project Management

In any deal there are a lot of necessary steps to take. Whether buy-side, sell-side, investment management M&A, asset management M&A, or even if it involves an investment bank, private equity firm, or corporate development business, the necessary workflows are intricate.

Many hands are involved in each deal, confidential information is shared, and hard decisions are made.

During the deal, it is important for the deal team to know exactly what stage these processes are in, while also being able to see the big picture and end goals.

m&a project management software

Until recently, the M&A due diligence process required long email threads, virtual data rooms, Excel trackers, and other tedious forms of m&a project organization and communication. But not anymore.

After decades of managing deals with outmoded forms of technology and practices, project and deal management software has finally made its way to the M&A industry. M&A management teams are now able to centralize communication, organize workflow, and track progress on one platform.

Why Should You Use M&A Project Management Software?

If you didn’t know how powerful project management software is already, here’s why you should start utilizing them right now.

M&A project management and deal management software eliminates the tedious practices analysts and associates often engage in when performing deals, such as:

  • Organizing diligence documents on Excel trackers
  • Shifting through long email threads in order to communicate with buyers and clients
  • Using multiple platforms to store and share data

Instead, M&A project management software provides advantageous benefits such as:

Workflow Delegation

  • M&A project management software ensures that everyone is aware of their own individual responsibilities, when someone else is spearheading a task, and where additional help is needed. This prevents gaps in the workflow and duplicate work, and encourages collaboration when needed.

Secure File and Document Sharing

  • Finally be able to upload files, share documents, and have organized dialogue all in one secure place. M&A software tools provides a one-stop-shop to share and transfer files and documents in a safe way. It also enables quick feedback.

Internal and Deal Management

  • You can manage internal work, as well as multiple deals at a time. For example, pipeline features keep each deal separate and organized. Each deal can have its own separate room, where teams can create a staging folder, complete due diligence, fulfil buyer requests, store data, and anything else you need to do during the deal’s lifecycle.
M&A project management benefits

However, M&A project management can help complete due diligence up to 40% faster.

One of the more difficult problems faced during due diligence is that deal teams are forced to use softwares and online m&a platforms that are not well designed for aspects of M&A.

For example, virtual data rooms are a great place to collect, host, and share files and documents.

virtual data room

However, that is where data room capabilities end.

Team members must therefore use other platforms to complete diligence. This adds to the places in which work is being done and further dilutes communications and task management.

If that seems illogical, it’s because it is.

That’s why, M&A needs a project and property management software designed specifically to conduct all aspects of a deal.

M&A management software
Software designed for M&A provides a central location to manage resources, tasks, requests, deadlines, projects, and communication in M&A projects.

Updates are made in real-time, allowing you to share the most up-to-date information. Since all the information is centralized, users can run detailed analytic reports that track deal progression, gage buyer interest and aid integration. Such platforms also enable deal teams to identify bottlenecks early, giving users a competitive advantage.

Asset management M&A software, like DealRoom, also saves users thousands of dollars. Instead of paying per page for necessary data room functions, M&A project management software includes a secure data room for all your documents, and only charges a flat-rate.

M&A Project Management Tools

Any company that is developing its M&A project management capabilities would be foolhardy to do so without technology. There are a growing array of capable software solutions that can help companies to navigate their M&A journey more efficiently.

DealRoom has been developed for the M&A community, having consulted with some of the world’s most prolific dealmakers. Its package includes:

1. Pipeline management

DealRoom’s Pipeline Management Tool was developed in collaboration with M&A project managers. Teams can access all of the deals in their pipeline using the tool’s deals dashboard.

The strength of the Pipeline Management tool is that it gives M&A practitioners an overview of all their M&A activity and how each deal relates to the others, rather than treating each deal separately.

M&A pipeline management tool

2. Due Diligence management

We understand the importance of a strong due diligence process for successful transactions. We have worked with hundreds of M&A practitioners to develop what we believe is the most comprehensive suite of tools on the market for due diligence.

Diligence teams gain access to extremely detailed checklists and industry-specific guidelines, that give them confidence in their due diligence process. The DealRoom diligence tool also allows fast and easy communication between deal participants, including the tool’s unique request function, where new documents or information can be requested using an easy-to-use template.

due diligence management tool

3. Integration management

In many ways, the hard work for deal participants begins when the transaction closes.

DealRoom’s Integration Management empowers users to take control of the process even before deal closing. It divides the process into a series of workflows and timelines, ensuring that every component of the post-merger integration is addressed as efficiently as possible.

Taking all three tools together, DealRoom provides its users with a fully integrated M&A project management platform that provides a roadmap from deal origination all the way through to a comprehensive integration of the target company.

M&A integration management tool

How to Successfully Manage Your M&A Activities?

In order to successfully manage M&A activities, teams need to be equipped with the right tools. They need to use a platform specially designed for M&A. One that allows every aspect of the deal, from sourcing, all the way to integration, to be managed in one spot.

M&A project management software is bringing M&A processes into the 21st century.

M&A deal management software includes the tools and techniques required to complete a deals more efficiently, more timely and more successfully. The software is designed specifically to fix the inefficiencies commonly seen in due diligence and throughout a deal’s lifecycle.

Asset Management M&A Software includes the following features:

  • File Sharing & Data Export
  • Drag-and-Drop Upload
  • Custom Permissions
  • Full Text Search
  • Real Time Analytics & Custom Reporting
  • Requests and Task Management, Request Import
  • Visual Request Lists & Progress Tracking
  • Live-Link Documents & Labels
  • Notifications & Comment Capability
  • Trend Analysis and Forecasting
  • Follows an Agile Methodology
  • Assignee and Reviewer Options
  • Virtual Data Room

The list above is not just a list of fancy features. This is a list of new techniques that are changing the way diligence management is approached and managed. The techniques above are allowing deal teams to close deals 40% faster,  they transform the way common tasks are approached, and are bringing deal management and procedure into the 21st century.

A key aspect of these techniques is a method called Agile. Traditionally, deal teams use a waterfall approach to deal management, a strict, linear method. However, Agile principles are much better suited to M&A deals’ unpredictable nature.

The Agile M&A Approach

The Agile approach takes advantage of parallel, asynchronous workflows to allow m&a project teams to work in small increments, optimizing the completion of individual tasks while minimizing wait times between the tasks themselves.

Agile M&A management approach

However, in order to properly utilize Agile, deal teams must implement project management softwares that provide transparency, centralized communications and organize priorities. The days of organizing and tracking critical information on Excel and communicating with clients, buyers and internal team members over long email chains must end.

How M&A Management Software Benefits Every Deal Stage

Stage #1 - Due Diligence

The quickest way to start using project management software for due diligence, is by importing a pre-made request template. By importing a pre-made template, the data room and folder structure is automatically populated and organized. From there, users can start fulfilling requests using drag and drop upload. They can also assign task roles, communicate with other users, and invite new users to the room.

When teams use M&A project management software for due diligence, over traditional data rooms, it allows them to assign roles. For example, investment banks can assign the analyst, associate, and vice president on a deal to their specific roles. They can also request documents, files, and information from their clients and additional third parties.

Stage #2 - Integration

During diligence, teams gather and collect every little detail about the company. Information collected during diligence, that is crucial for a successful integration, can be accessed after the deal is complete. The knowledge transfer allows everyone to see the big picture early on. Teams can plan for post-merger integration early by having real-time visibility to enable strategic problem solving and identify synergies. This helps teams with visioning, shaping, and transforming, all crucial to a successful PMI process.

Stage #3 - Internal Management

Not only is deal management important, but so is internal management. And at the end of the day, the more efficient your internal process is, the more effective your company can be to its end users. With project management, teams can store, access, and share internal documents and tasks. They can also use project management software to assign roles and set deadlines, allowing for visibility and accountability.

Stage #4 - Pipeline management

M&A project management software can be used for different stages of the deal, such as sourcing, or even just pipeline management. The goal is to keep teams organized for internal and external processes. Pipeline management allows deal teams to track multiple deals in a visually simple and easy-to-navigate way. Pipelines are typically displayed in dashboard form and include deal specifics for varying stages, all on one page.

What Does an M&A Project Management Manager Do?

M&A Project Managers oversee M&A transactions from start to finish. This means that their responsibility begins at target identification and concludes at the post-merger integration (PMI) phase.

At each step of the transaction, they are expected to coordinate everything from internal responsibilities, hiring from outside, and the company’s interactions with the target company stakeholders.

Experienced M&A Project Managers generally have a method of working that provides them with a rough idea of how long each step of the process will take and what resources will be required.

M&A project manager responsibilities

M&A Project Managers are thus expected to ‘wear several hats at once’. Major capabilities of M&A project manager that will be required include:

  • Leadership: It’s not difficult to see how being the manager of a project that could dictate the success of the company for several years to come requires solid leadership skills. With at least two companies involved in any M&A transaction, a significant part of the success of any deal is managing people.
  • Communication: Closely related to leadership, the M&A project management process involves so many different stakeholders from both companies, that its success is pinned on good communication.  Good M&A project management software (insert link) can aid this.
  • Cost Management: M&A transactions can become expensive exercises in themselves, even before the deals are closed. An essential task of any M&A project manager is to ensure that costs are kept under control, and that maximum output is achieved from as few resources as possible.
  • Quality Management: With so many moving parts to a transaction, it is easy to compromise quality for elements of the transaction which appear less important. The M&A project manager’s role is to ensure maximum quality at every stage, ensuring the deal generates as much value as possible.
  • Planning: Closely related to quality management and cost management skills, are the M&A project manager’s planning skills. This means knowing how much resources to dedicate to each stage of the project, how long these projects should take, and what the contingencies are likely to be.
  • Information Management: The information generated by any M&A transaction has the potential to become overwhelming if not management properly. M&A Project Managers would be well advised to leverage good virtual data room providers to help them to avoid information overload.
Useful resources:
Developing Leadership In M&A
Tone at the Top - Intersection of Leadership and Culture in M&A
The Role Of Leadership In Mergers & Acquisitions

Implementing a Phase-Gate Process in M&A

Many M&A Project Managers implement a phase-gate process to get deals over the line.

Each stage of a well conducted M&A project should have an objective (or objectives) that need to be met before moving onto the next. These can be broken into overarching objectives - which tend to be the case when drawing up a long list - and micro objectives, where more detailed, careful assessment is required.

A well designed phase-gate process is composed of each of the following stages:

1. Strategy Approval Stage

The M&A project manager works with the company’s corporate development officer, strategy manager, or vice-president, to set the criteria for potential acquisition targets.

In the phase-gate process, only those companies that meet these criteria can be considered. Other issues to be considered at this stage include the likelihood of the target company owners being open to a deal, and how compatible the target company’s culture is with your own.

2. Intermediate Stage

The intermediate stage, sometimes referred to as the approval-to-negotiate phase, encompasses a full valuation of the target company, all of the due diligence phases (each governed by their own individual phase-gate processes), and even some issues around the post-transaction integration.

Ultimately, the output from this phase is a non binding letter of intent, a clear roadmap for how the company approaches negotiations with the target, and an outline of confirmatory due diligence.

3. Deal Approval Stage

The deal approval stage is essentially a continuation of the intermediate stage, with most of the remaining issues (confirmatory due diligence), approval from the board of directors, regulatory clearance, and post- due diligence valuations.

At this stage, there are no new issues to raise, but it does provide everyone with a good opportunity to speak up if they believe, for whatever reason, that a transaction should not go ahead.

Talk to us today about how our M&A Project Management solution can turbocharge your M&A experience.

Useful Links

What is M&A? - The Complete Overview

dealroom

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