Mergers & Acquisitions
“In any merger there will be challenges in terms of culture.”
– Ajay Piramal, one of India’s richest businesspeople
The sad reality is that many mergers don’t live up to expectations, leaving the legacy firms, in some ways, worse off than before the merger. A key reason is that, frankly, many mergers were a bad idea from the start – and others have been poorly implemented. That said, the pace of mergers continues to accelerate.
Consideration of a merger needs to be approached with the utmost seriousness of purpose. If a merger goes through, it will be one of the most consequential events in your firm’s history. And, your job is far from done at the close of the merger. In many ways integration is the most critical part. The process – pre and post – needs to be thorough and take into account the myriad implications, large and small, of a merger.
How, then, to avoid the pitfalls?
For example, many firms intent on a merger start off by developing a list of possible counter-party firms. We think this is a bit premature. We think a better place to start is to clarify your firm’s strategic goals and aspirations. That is, you need to be crystal on why you want to merge and what you hope a merger will accomplish.
Another missed opportunity is failing to enhance your attractiveness to firms you may want to combine with in order that your appeal is as compelling as possible, and, therefore, more likely to be received positively.
No merger is ever like any other. We approach each possible merger with both a nuanced and a gimlet eye, attuned to the many factors necessary to align for a merger to work and the even greater number of ways mergers can fall apart.
At Adam Smith, Esq., we also have a range of proven techniques and programs to ensure each aspect from financial to cultural is addressed as effectively and efficiently as possible. We also have access to a wide range of industry analytical tools that can also help inform decisions.
For example, one technique we use can separate the “wheat from the chaff” early on. Another uses an I-bank approach which models and compares alternative combination options – that is, how do hypothetical firms A+B, A+C, A+D, etc. compare in terms of strategic fit, likely financial performance and possible departures, etc. (Comparing the possible candidate firms on their own is a relatively unenlightening exercise.)
We can and have provided guidance on the following:
- Helping firms clarify strategic goals for a merger and then prioritize what’s most important – because you will never get everything you want; focus on what matters
- Broadly analyzing opportunities through both a geographic and practice area lens
- Analyzing alternative combinations
- Securing consensus and alignment at both firms
- Facilitating disclosed or undisclosed approaches
- Advising you throughout the discussions and negotiations
- Developing bespoke roadmaps for post-merger integration