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Deal Communications

Get to the Finish line with Effective Communication
There is no one involved in M&A who wants to see a deal killed because a serious issue was not voiced sooner. Foster an environment of communication to get the deal over the finish line. Is information unavailable or will it take a while to gather? Let the teams know. Curious if there is perhaps a work around? Ask your advisors! Is a request or process unclear? Clarify with the person asking! Found a problem that might derail the entire deal? Chat about it. Everyone involved in the transaction has the same goals in mind. Get there sooner and with a result all involved will be happy about through effective communication.

Schedule Those Weekly Meetings with Advisors
Remember our suggestion about fostering an environment of open communication? What better way to do that than by hosting weekly meetings with your advisors? This provides a great opportunity to discuss progress, questions and concerns. You may also want to invite financial, legal or technology advisors to the party to impart transparency across teams. Not to mention save time by maximizing efficiencies when working towards your deadline. In our experience, these meetings identify any major concerns early in the process as opposed to uncovering a major issue right before deal close. Schedule those weekly meetings now and thank us later.  

Fire Drill: Stop, Drop and Communicate
Avoid the usual fire drill by setting and communicating realistic timelines from the word ‘go.’ You’re not alone when dealing with capacity issues, so make effective use of everyone’s time by working smarter, not harder when communicating realistic timelines. 

Get those meetings and deadlines for documentation fulfillment on calendars! Communicate when you are aiming to close the deal and back into your deadlines from there. Deals generally take a while to close, and you want to give the teams enough time to know the ins and outs of the business and the transaction. 

Have honest conversations around the realistic amount of time certain tasks will take, especially when relying on others for information. Due diligence is serious business and should not be rushed. When you need a helping hand, Sikich’s transaction advisors are ready to jump in. 

Everything Else You Should Be Thinking About

EMBRACE YOUR SKELETONS
We’ll say it loud for the people in back – no one in M&A is trying to kill a deal or get you with a “gotcha” moment! As experienced M&A professionals, it is our duty to ask tough questions and pull any skeletons out of the closet before it becomes the 12-foot skeleton outside of your house for Halloween. Invite the skeletons to the transaction table, dust off the cobwebs and work with your transaction advisors to mitigate any negative impacts. Together you can create a plan to address the skeletons (and we don’t mean giving it a funny nickname).

HAVE YOU LOOKED INTO LOW VS. HIGH CUSTOMER CONCENTRATION?
You’ve locked your sights on a potential acquisition. It operates in an interesting industry, its revenue meets your criteria, and it seems like a match made in heaven. You start to dig in and realize it has a high customer concentration. In fact, 10% or more of revenue from a single customer gives us transaction advisors pause. What next? Do your due diligence and talk to the customers to uncover what it is.

Why does this one customer generate more than 10% of revenue?
Is it due to a relationship with the owner? Will they remain a customer if ownership changes?
Is it due to a relationship with a sales representative? Do you need to lock in that rockstar sales rep as part of the deal?
Generally, low customer concentration will create fewer issues in the long run. However, uncovering these answers will help structure the deal for success. Our team of transaction advisors stand ready to help you dig into the deal and ask these questions.

BRAND REPUTATION NIGHTMARES, LEGAL HEADACHES, UNEXPECTED COSTS – OH MY!
The last thing you want to acquire is someone else’s data breach. As an M&A professional, you probably aren’t an expert on cybersecurity. Luckily, we know a few. Here are some tips to consider when acquiring:

  • Multifactor Authentication – The 80/20 rule: 80% or more of breaches could have been avoided if multifactor authentication was enabled, yet only 20% of organizations have multifactor authentication properly enabled. Enable it; don’t be the 20%.
  • Incident Response Documentation: The worst way to find out if your incident response plan is a good one is being forced to use it…with a real incident. Strategize your plan. Think through all scenarios. Then, test it before an incident occurs.
  • Protect Sensitive or Regulated Data: Does the target company have sensitive or regulated data that must comply with protection standards such as PII, PCI, PHI, CUI, ITAR, etc.? Non-compliant environments can drastically change deal value if remediations are needed to bring an environment into compliance.
  • Penetration Testing: When was the last time a penetration test was completed? If the answer is “I don’t know”, it’s probably time for one. In fact, if it hasn’t been performed in the last year, it’s not meeting industry best practices and is likely a hacker’s daydream.
    24/7 Managed Security Service Provider: Most security events happen on nights and weekends when the bad guys know you’re less vigilant. Consider a 24/7 managed security service provider that can always watch your back. Like your own, personal cybersecurity superheroes.

When making acquisitions, avoid unexpected costs, legal headaches and brand reputation nightmares when you work with Sikich’s dedicated IT experts. We’ll help you keep your portfolio companies secure and operating at peak performance. Contact us today to learn more.

DON’T LET TECHNOLOGY COSTS EAT YOUR BOTTOM LINE
One cost-saving strategy post-acquisition is to integrate technology and decrease technical spending. From duplicate implementation and ongoing costs to tech support resources, there are many ways to reduce technology spend.

Start the road to technology savings from day one. Grab that big piece of the integration pie with assistance from our team before those costs eat your bottom line.

Team Conversation

CONTROL THE CHAOS
From turnover to decreased productivity, people issues can significantly cut into profitability. To employees, a merger or acquisition is not just a corporate strategy – it can be a disruptive and traumatic event that generates feelings of uncertainty, chaos, stress and lack of productivity. The human element can often be overlooked when making major business decisions, and that’s where change management comes in.

Help ease the transition through change and bring your most important asset up to full productivity faster with support from Sikich’s human capital management experts. Contact us today to learn more.