HOW TO ACQUIRE A COMPANY? I made M&A deals in more than 6 countries. Quick Reco&experiences

As a BUY-SIDE consultant, I have made or participated into many deals for acquiring small&medium size companies working for corporate groups such as Securitas, Carglass-Belron and Nexteer in France, Morocco, Bulgaria, Brazil, Greece, China and Mexico. What are my experiences and recommendations?

General key aspects:

• Look for the correct target, don't buy a company only because an opportunity came to you. Investigate the target company that makes sense according to your Acquisition Strategical plan that you have validated with the board of directors.

• Buy people & knowledge instead of looking only for numbers and financial dashboard & stories,

• Prepare your target to be integrated before the acquisition. For the project in Morocco, I had to prepare the target during 18 months before starting the negotiation process and due diligence.

• Analysis the DNA of target, its culture and behaviour before signing,

• Build a new identity with A & B companies, instead of imposing the A company culture

• The acquired company if it is a bad situation/results, will not solve your bad results and context,

What you should not forget:

• The due diligence phase is a critical path in this type of project. All the consulting and deal team always think about financials, legal, IP, Sales&marketing, brands etc... but do not forget the cultural aspects and IT back bones. Some failures just happen because there is no communication/matching between the data basis of the IT systems.

• An acquisition budget is not only the transaction amount but should anticipate a large amount for the post-merger integration. Cutting this part of the budget will kill the success and will not give you the opportunity to reach the synergies that you were expecting.

• You project of merger will be successful only if people are on board with motivation, incentives and strategical project.

• Deal team and integration team should be committed during the negotiations,

• Please don't buy a company just to say that you made an acquisition, in some situations it is really better not to do the deal if you are not convinced

Which strange cliches that I killed?

• each company and country has its own culture, but almost everybody or organization works according to basic humans considerations (shared dreams, vision, motivation, responsibility, stress, meaningness, respect..)

• each company feels that they belong to a "family" framework, "we are very special, nobody behave as we do", it's not true. Processes, products, services are different but leverages and mechanism are all the same: looking for gain, success, power, leadership, respect, harmony... and more

• Corporate companies are not human: it is not true, everything depends on the middle and top managers you meet and the culture and DNA that they have developed. Stupid guys are everywhere and nice people too, whatever is a small or big organizations.

I could write a collection of books about this topic, but it is enough for today for you to approach an M&A project in good and sustainable conditions... .-)

Geoffroy Vilbert