Why are M&A Playbooks essential for deal success

Why are M&A Playbooks essential for deal success

  • Post category:Articles

“An M&A playbook is a roadmap for the merger and acquisition process. It contains some of the best tried and tested practices designed to assist the organization during the complex, information-dense period”.

Mergers and acquisitions (M&A) is an essential practice for businesses looking to gain access to new, ground-breaking technologies, processes, and innovations that can give them a competitive advantage in the industry. They can prove to be a powerful growth vehicle, providing businesses with a better cash position, a larger market share, a more significant client base, and access to emerging technologies, markets, and delivery platforms. In such situations, M&A is a compelling investment option that businesses should use to make the requisite strides in a dynamic environment. Leaders must understand the potential costs of not proceeding with a merger or takeover that might increase their businesses’ profitability or productivity.

Despite these challenges and the best intentions, many businesses fall short of their attempts to integrate people, processes, and technology—much to the detriment of their company/business/organization. Unsuccessful integration efforts will take way too long, wasting precious time, workforce, funds, and other tools that do not support objectives. As a result, opportunities to create value go unrealized while business disruptions increase. Executives and other employees with complicated institutional experience can become dissatisfied and leave. The company’s image and willingness to raise capital gets affected as shareholder value falls. While ambiguity continues to harm the company’s ability to survive and deteriorates its relationships with vendors and customers, unexpected costs and missing deadlines can make the whole venture much more expensive than anticipated. Now, that being said, a lot goes into executing a good merger — one in which targets are accomplished, synergies are captured, and value is delivered.

What is an M&A playbook, and when does it come into the picture?

One of the most critical strategies an organization will use in high-pressure integration efforts is playbooks. According to PwC, a well-developed playbook functions as both a business plan and a how-to field guide, keeping the integration team focused on creating value while providing step-by-step guidance for tactical implementation.

An M&A playbook is a roadmap for the merger and acquisition process. It contains some of the best tried and tested practices designed to assist the organization during this complex, information-dense period. Many organizations fail to define a comprehensive playbook that is driven by the corporate development leadership team. It is implemented across organizations that help them drive a systematic M&A process across all the deals.

The majority of times, M&A Integration teams need a resource to assist them in working quickly, coordinating activities, and seeing the complete 360-degree view – from the big picture to the minor aspects of a deal. In such situations, an extensive M&A playbook can keep everyone on the same page and help in delivering the correct value for the deal.

Why do leading companies use M&A playbooks?

Leading companies create playbooks to get help in maintaining M&A integration teams and keep individuals focused and organized. Apart from that, an M&A playbook is used by companies/organizations for:

  • Constructing a rigorous, systematic framework for integrating target companies and understanding how to tailor processes to suit the demands of individual deals
  • Improving speed, consistency, delivery, and control throughout the deal process
  • Establishing a team-based governance structure that links the integration strategy with task-specific actions
  • Prioritizing initiatives and allocating resources across different business and global functions streams to make sure each leader is identified with his key action on the deal
  • Clarifying ownership of processes and handoffs between internal teams throughout the deal process
  • Sharing tools, documents, expertise, and other resources that can help in various phases of the deal
  • Provide preparation, if not qualification, in integration activities with all those involved across various roles and geographies

Why are M&A playbooks essential for your deal?

In a 2017 PwC M&A Integration Survey Report, only 50 percent of executives surveyed said they felt their deals were a financial success, and 47 percent considered their deals to be an operational success. This is not surprising! In an M&A, the disruption surrounding delayed post-deal activities often impedes a company’s ability to simultaneously focus on maintaining current operations, carry out an integration plan, and realize the synergy and value predicted when the deal was approved.

A successful track record in running a company is no guarantee of success in transforming the business. In a sophisticated, ultra-competitive global marketplace, continuous industry importance and financial sustainability are essential and are always at stake. Therefore, this is at the forefront of executives’ minds when driving the evolution of their company through complex M&A endeavors. To make the gamble worthwhile, the company/organization must have a winning execution plan to convert the strategy into success.

Therefore, an M&A Playbook is a required investment in a company’s ability to leverage best practices in M&A.  It sets the groundwork for evaluating the deal’s worth and successfully realizes the deal’s promise. 

Having said that, we also know that humans are greater than the tools they invent. To ensure that all members systematically and diligently leverage a Playbook’s prescriptions, it must be built, used, and refined with strong leadership direction, enthusiastic ecosystem-wide acceptance, and a sustained organizational commitment, and that is what, MergerWare is here for!

The Most Comprehensive M&A Playbooks

Playbooks are essential for establishing a successful, repeatable process. MergerWare’s M&A Playbooks provide expert advice, allowing the team to make confident strategic decisions and execute M&A deals effectively. Good playbooks serve as a foundation and a blueprint for the entire integration process, including templates, strategies, and procedures to drive decision-making, future moves, risk management, tasks, responsibilities, and performance indicators. An effective playbook saves time, reduces expensive mistakes, and keeps staff on track to meet project objectives.

MergerWare’s all-in-one M&A software makes it simple to fine-tune the playbooks based on business facts and lessons learned, allowing teams to create a smoother process as they proceed. We provide customers with several playbook solutions, including bundled and premium playbooks.

Depending upon your needs, MergerWare provides the industry’s most detailed playbooks for all levels of the M&A lifecycle, based on realistic and real-world practice. Our extensive set of best practices guides the company through the complexities of M&A processes, including the required steps and activities from initial deal strategy to post-integration planning to long-term value capture.

Want to get your hands on an M&A playbook that serves your deal’s purpose right from day one? Connect with us now!

We can help you establish a systematic, high-quality M&A playbook for your company that diminishes the risks that come bundled along with the traditional approach of deal management.

Visit us at  mergerware.com and schedule a personalized demo with one of our product specialists.

Author

Muskaan