To make the M&A deal happen, get the best of it in the process and ensure all parties will benefit from it in the future, there are few necessary steps to take. To get to the actual integration, it’s necessary to follow through a few crucial stages. Conducting due diligence is one of them, which is a task that includes examining documentation and gathering information in an M&A data room on the company of interest prior to the integration process. Without it, making a final agreement can turn out to be great loss, both time-wise and money-wise for the company interested in merging or acquiring the other.
Because it is the determining element that helps the company get to a definitive agreement, due diligence needs to be done properly, thoroughly and with great attention to detail. Not only the team conducting due diligence needs to go through piles and piles of documents, find and evaluate all important points, but they also need to do so without a single research and analysis gap. When this complexity meets with team members, you get a tight knot and risk to lose or overlook important information.
Fortunately, there are few clever ways to ensure a more streamlined integration process based on crucial information collected during due diligence. These are:
Getting a virtual data room that works for you and your team
The starter point to making a final decision is having everyone be on the same page and all information neatly presented and gathered in one place.
During due diligence, teams gather a lot of information that needs to be examined, so getting them organized and shared in a VDR is a time-saver. You want to have all the information in one place and easily accessible prior to making a transaction and concluding the M&A deal. All communication needs to be in once place, all documents available to the right people, listed and filed.
A VDR is mainly made for complex investment endeavors such is the M&A integration process. Without properly organized information, confidentiality and having control over gathered information you’ll end up with a lot of headaches and a pile of mess to work with, which can easily lead to missing key points in the process. There are a lot of virtual data rooms on market such as DealRoom, Intralinks, Securedocs, so you can choose any that fit you best.
Prioritize based on the due diligence checklist
Once all the important documents are in order, going through them while following the due diligence checklist, allows taking a look at your own company and the one you are about to invest in.
What are the weak points of your company? Does merging has the potential to weaken already critical areas? Can these be overcome? Is the company a good strategic fit? What is the greatest benefit vs. the greatest threat integrating can bring? What will be transaction costs and how much of a prize you can pay for a company?
You need to know what you are buying is absolutely worth it. Prioritizing can be seen as evaluating the overall compatibility of two parties based on due diligence results. If a company struggles with legal or financial matters in a specific sector, evaluate how much of a fuss dealing with these issues can create. Create priorities and red flag boxes to use the collected data to evaluate where you truly stand. Highlighted threats discovered during due diligence allow finding potential solutions early on, prior to finally signing the deal. By examining crucial points of possible post-merger integration checklist and comparing it with collected data from due diligence, you will be able to make a link.
Collaborating with experts
Because the magnitude of investing is huge, it is important to evaluate all possible scenarios. To help you with that task, especially if you have no previous experience in investing, to prevent potential losses, it is wise to consult investment banks and analytic specialists.
Investment banks will not only support you financially but can also help you find the best companies to invest in if after due diligence and during a discussion with the other side you start doubting the choice of company you have made. This is why having them collaborate with you from the beginning is can make the whole process a lot easier.
Working both for buy-side and sell-side, when it comes to the actual transaction, which is the next step after due diligence, investment banks can represent you and offer professional support in establishing the best possible value. Investment banks can help even when you are strategizing, so it is always a good decision to find a bank that will help you invest wisely. This will make the integration process easier and minimize potential risks.
Making fast and well-calculated progress when merging or acquiring is possible when knowing how to play and with whom. It is a combination of proper organization, strategizing, prioritizing and collaborating with experts who know how to make the best of each M&A deal that makes the process successful for all parties involved. It is important to know what you are aiming for and have at least a frame to work within when it comes to basic strategy and goals. The rest can be handled by experts in the M&A field, so take the time to find the investment bank to support you.
No matter which side of the M&A deal you are part of, take the time to find the best professionals to collaborate with. Don’t fret from pricier virtual data rooms if they can ensure smooth integration and allow for the free flow of data within the team. In the end, investing in the right software, having your vision clear, data sorted and analyzed in detail will prevent disastrous financial failure everyone wants to avoid.
Author’s Bio: Lori Wade is a writer who is interested in a wide range of spheres from business to entrepreneurship and new technologies. If you are interested in M&A or virtual data room industry, you can find her on Twitter & LinkedIn or find her on other social media. Read and take over Lori’s useful insights!