How to Build a Winning M&A Team
For small and medium-sized enterprises (SMEs), the difference between a successful deal and one that falls short often boils down to one key factor: the quality of the M&A team. Unlike day-to-day business operations, M&A is a multifaceted process involving many moving parts—from financial evaluations and due diligence to negotiations and post-deal integration. Navigating this complexity requires a team that combines the best internal talent with the expertise of external specialists.
In this post, we’ll explore the critical components of a successful M&A team, the importance of blending internal knowledge with external expertise, and how structuring your team can maximize the value created during an M&A transaction. For SMEs, building the right team can make all the difference in managing a smooth, efficient process and ensuring the deal achieves its strategic objectives.
Why You Need a Specialized M&A Team
Many SMEs underestimate just how different M&A is from running day-to-day operations. Over my years of experience, I’ve encountered numerous transactions where smaller companies attempted to manage every aspect of the M&A process with their existing internal staff, most of whom had little to no M&A experience. Unfortunately, many of these deals failed to create the expected value, often because the company lacked a specialized M&A team.
Regular operations rely on your internal teams to handle product development, sales, customer service, and other business functions. However, M&A introduces unique challenges that require a specialized set of skills. Without the right expertise, you might overlook critical details during due diligence, negotiate less favorable terms, or struggle with post-deal integration, which can significantly reduce the deal's overall value.
A winning M&A team can manage these complexities and guide the deal from initial discussions to successful closing and integration. The team’s primary goal is to maximize value, mitigate risks, and ensure the acquisition aligns with your company’s broader strategy.
For SMEs, the challenge is twofold:
Limited Internal Resources: Unlike large corporations, SMEs rarely have in-house M&A teams or staff with extensive deal-making experience.
Unfamiliar Territory: M&A is typically not a core function for most SMEs, which means their leaders and managers may lack the knowledge needed to manage a successful transaction.
To overcome these obstacles, SMEs must combine internal knowledge with external expertise, creating a team capable of navigating the full M&A process.
Combining Internal and External Talent
The most effective M&A teams balance internal staff—who understand the company’s goals, culture, and operations—with external experts who bring specialized M&A knowledge. This combination lets you handle the deal's technical aspects while ensuring the acquisition fits seamlessly with your company’s broader objectives.
Internal Talent: The Company Experts
Your internal team members bring invaluable insights into your company’s strengths, weaknesses, and strategic priorities. They understand your business inside and out, providing crucial context during decision-making. Internal staff also ensure that the deal aligns with the company’s long-term vision and can address integration challenges early on.
Key Roles for Internal Team Members:
CEO or Executive Sponsor: The CEO or senior executive provides the high-level direction for the M&A process, securing buy-in from stakeholders and ensuring alignment with the company’s broader strategy. Their involvement signals the transaction's importance and keeps the team focused on strategic outcomes.
Finance Director/CFO: The CFO assesses the financial implications of the deal, including return on investment, financing, and financial system integration post-deal. This role ensures that the deal makes financial sense and is sustainable.
Operations Leader: This leader evaluates how the target company’s operations align with your own, identifying potential synergies or integration challenges. They play a vital role in making sure operations run smoothly post-acquisition.
HR and Culture Experts: M&A is as much about people as it is about numbers. Your HR or culture expert manages talent retention and navigates cultural differences between the two companies, ensuring a smoother integration.
While these internal team members bring deep knowledge of your business, they likely lack the specialized M&A expertise to navigate the deal's complexities. That’s where external experts come into play.
External Experts: The M&A Specialists
External advisors bring specialized knowledge, hands-on experience, and a fresh perspective. They have managed M&A deals before and can anticipate challenges often arising throughout the transaction process. These experts can fill the gaps where your internal team lacks the required expertise.
Key External Experts Include:
M&A Advisor: As your guide throughout the process, the M&A advisor offers strategic advice on target identification, negotiation, and deal structuring. They help ensure that the acquisition makes strategic sense and that you negotiate favorable terms.
M&A Lawyer: Legal complexities abound in M&A. An experienced M&A lawyer ensures that contracts, liabilities, and regulatory requirements are all in order. While larger firms may be necessary for high-profile deals, smaller boutique firms often provide more tailored services for SMEs at a lower cost.
M&A Accountant: Financial due diligence is critical in any M&A transaction. M&A accountants review the target company’s financial health, conduct forensic audits if necessary, and help structure the deal for tax efficiency and compliance.
Industry-Specific Experts: Depending on your target, you may need experts with deep knowledge of that industry. For example, when acquiring a tech company, you may need a technology expert to assess intellectual property, scalability, and other technical aspects.
Why You Don’t Always Need Big Firms
It’s a common misconception that successful M&A transactions require large, well-known advisory firms. While these firms can bring vast resources, they aren’t always the best fit for SMEs. Smaller advisory firms often offer the same level of expertise but with more personalized service at a more competitive price.
For SMEs, working with smaller firms can be advantageous because they:
Offer customized services designed to meet the specific needs of your business.
They are more agile and adapt quickly as the deal progresses.
Provide greater access to senior-level talent, ensuring that experienced professionals handle your deal.
Choosing the right advisor is about finding a team that understands your company’s unique challenges and can provide the support you need to navigate the M&A process.
Creating More Value with a Winning Team
The ultimate goal of any M&A transaction is to create value—whether through revenue growth, cost synergies, or market expansion. A well-rounded M&A team that combines internal knowledge with external expertise can help you realize that value.
By building a winning M&A team, SMEs can successfully manage the deal’s complexities, mitigate risks, and maximize the acquisition's benefits. The strength of your M&A team directly impacts the quality of your decisions, the effectiveness of risk management, and, ultimately, the transaction's success.
In M&A, success is a team effort—and building the right team is the first step to achieving great results.
Closing Thoughts
For SMEs, building a winning M&A team is the cornerstone of a successful transaction. By combining your internal team’s deep knowledge of your business with the specialized skills of external experts, you can confidently navigate the complexities of M&A, minimize risks, and maximize the value created in the process. In the end, your team’s strength will determine the deal's outcome.
A great M&A team is the key to great M&A results.
