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Adapting to a “New Normal”: How COVID-19 is changing M&A

During ordinary circumstances, mergers and acquisitions are undoubtedly one of the most complicated ventures an organization can undertake – there are few if any,  other corporate activities that can have a greater impact on people’s lives, the way the business operates and the potential for growth.

The COVID-19 crisis is having a profound impact on the economy and M&A in particular.  Global M&A deals are down well over 20 percent from last year the picture continues to get worse.

Remote working is the future of work.

So, what, if anything, can we take as a potential positive from this?

One of the potential benefits that will come out of this is the improvement of our remote working capabilities.  According to Microsoft, the number of online meetings has increased over 200% in just the last month: they saw over 2.7billion meeting minutes in a single day.

We’ve seen a new daily record of 2.7 billion meeting minutes in one day

200+% increase in the number of online meeting minutes in only 30 days?

During less tumultuous times, it typically takes up 3 months for a smooth transition from on-site to remote work. 

Because of the current crisis, organizations must make this transition much faster and they have to do it on the fly, dealing with the realities that not every employee has the right equipment, broadband access, and all the other elements necessary to maintain both productivity and corporate standards.

Making the Transition during COVID-19

Add to this, the fact that outdated management practices leave many companies mired in the past as it takes a major mental shift to adjust to a remote working environment.  Particularly if managers cling to the outdated notion that their teams have to be together and can’t be managed unless they are seen.

The crisis is forcing executives to try something different and, positively, they are finding out there’s real value in it. 

Where does M&A go wrong?

One of the major impediments to successful M&A transactions is continuing with a conventional, “manual” approach where data is shared and stored across multiple, disparate services, critical tasks are distributed across various and unconnected teams and too much time is spent chasing updates and compiling reports.  

The reality is that M&A is complex and multiple problems arise if the information is not shared organized manner. It leads to teams not understanding their specific tasks and not being able to focus. The best, M&A specific technologies help with the maintenance of information and allow faster access to the necessary data when required.

The best approach is based on a foundation of solid planning.

Until recently, solving these problems – especially in the heat of a deal – was not given the highest priority.  But today, where COVID-19 and its effects arrived very quickly, leaving very little time for those planning or currently engaged in M&A transactions to adapt to the tremendous impact the virus has had on us all.

Beyond Collaboration

M&A demands greater information security – especially as teams need to access information outside the controlled environment of the office network.  Using disparate tools to send, share and store information is a recipe for disaster.

92% of strategic buyers say that they have trouble in keeping data secure

To be successful in this difficult environment, teams must manage multiple dimensions of remote working and the best applications should be able to help that.

Changing the outcome of M&A demands to change the way M&A operates!

Mergers and acquisitions negotiations are complex, and executives often face unexpected developments that can cause significant delays or even scupper a deal.  Ad hoc and misplaced documentation can also have a serious impact on achieving synergy. 

Now is the time for M&A teams to embrace new technology and a digital transformation. 

The benefits of automating the M&A process is indisputable and the key is to recognize the power behind digitalization. 

Every company needs to be agile, run leaner and focus more than ever on driving effective M&A transactions as a critical means to improve performance, create new markets and quickly acquire skills and technologies to develop and grow the businesses.

An eagerness to understand, interact, respond and adapt every day is the key to what is means to be digital and agile.

In this new reality, where M&A teams are not only operating globally from different parts of the world but doing so on a remote basis. Digitalization maximizes transaction value by removing barriers to collaboration, and by updating obsolete work practices, it improves your ability to focus on realizing synergy.

The “Digital Mindset”

A critical element of adapting to the digitalization of M&A is changing one’s way of thinking if one is to adapt to this new reality.  While reviewing the anatomy of the M&A approach, the digital mindset of M&A should look like:

There are definite overlaps between the mindsets of traditional and digital M&A processes and culture. The digital M&A includes effective execution in a collaborative working environment with a strong focus on efficiency, accountability and making a difference.

The ability to align people at all levels around the organization’s vision, strategy, culture and values is what makes M&A digitalization a real force to be reckoned with.

MergerWare is a SaaS-based, secure enterprise digital platform dedicated to creating the most efficient M&A deal management and execution process from discovery to due diligence to post-merger integration activities. Get the real meat out of your deals by moving to the platform catering to the future of M&A. 

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Richard A. Martin, Jr

Anukriti Srivastava