Building a winning M&A pipeline is beyond knee-jerk decisions or conjectures not based on a thorough analysis of the deals to be made. What marks out successful acquirers in M&A is their ability to craft winning strategies.

In this article, you’ll learn all you need to know about how to effectively build a winning M&A pipeline.

So, let’s get started…

What many professional M&A acquirers consider to be a fundamental step in building a successful M&A pipeline is the ability to identify the right acquisition target, and this is made more effective when you adopt a repeatable, regular and systematic approach to M&A campaigns.

Thereafter, there are winning steps that can make your M&A pipeline stand out from those of the growing number of expert acquirers, which are listed below:

1. Strategy

Building a successful M&A requires pursuing the right deals using a properly defined strategy. A good M&A strategy goes a long way in helping acquirers identify which market sector is ideal, or not, for an M&A campaign.

In developing a perfect strategy, teams should answer important questions like “What’s our motive?” “What have we learned from past deals?” “Do we focus on acquisitions or organic growth?”

2. Be Proactive

There are M&A acquirers who tend to be reation-oriented or opportunistic when it comes to target screening, but the best approach is being proactive.

It will involve a lot of forecast in terms of desirability, feasibility and validity; and thorough strategic analysis. Proactive acquirers are able to understand the effects of acquisitions on their organizational objectives in the long run.

Read also about 7 Benefits of M&A Pipeline Management.

3. Know the Acquisition You’re Pursuing

Knowing the exact type of acquisition you’re pursuing can go a long way in helping you build a winning M&A pipeline. Some of the common types of acquisitions are

  • Synergistic Acquisitions: in this case, the target may not be a competition in a particular geographic market, but it will likely be in the same line of business with respect to products and services
  • Strategic Acquisitions: here, the target is to create a kind of disparity. That is, different products are offered to an acquirer but sold to similar end markets or the other way round
  • Diversifying Acquisitions: this target has the highest risk compared to the other types of acquisitions. In this case, there is no overlap between the target and the acquirer
  • Transformational Acquisitions: it is a type that is quite complex to manage, but it promises a significant potential for innovation
  • Complementary Acquisitions: unlike diversifying acquisitions, there’s a significant overlap between products, services, and markets.

4. Study and Determine the Market

No one can build a successful M&A pipeline without the market; therefore, it is imperative to study and understand the market. “What is the future of the market?” “Which market is growing, stable and attractive to customers, so I can focus on my target?” and more are questions to answer when determining the market.

5. Build the Perfect M&A Team

We’re in a very competitive world where there is hardly an organization without a healthy competitor. What therefore makes some organizations stand out is how much they have invested in building their team. A team of highly educated and experienced M&A professionals will give you an upper hand in building a winning M&A pipeline.

6. Employ the Digitalized Approach

Young and growing M&A organizations may not find it necessary to use a digitalized approach, because they are merely dealing with small volumes of data.

However, larger M&A organizations deal with large volumes of data, and it will save a lot of time, energy and risk of losing vital information when they employ a digitalized approach.

Tech companies like Google and Microsoft have made many software, backup cloud storage, and more available for M&A acquirers to have a hitch-free sail in building their winning M&A pipeline.

Final Words…

The goal of every organization, whether M&A or with a different focus, is to have a beautiful future in terms of impact on society and finances. And guess what? The ideas shared in this article have been used by many to their advantage, and it can also help your organization to realize all its dreams and goals.

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