A successful deal is one that benefits both parties and can be tracked through a variety methods. Although every deal is unique but there are some fundamental qualities that every winning partnership should embody.
Prepare Thoroughly
Before sitting at the table for negotiations, it is important to prepare thoroughly. This includes analyzing the landscape of the market and identifying potential synergies. Understanding your counterparts’ goals objectives, priorities, and motivations is essential. Understanding the other side’s goals, priorities and motivations can help you gain more leverage and ensure that your deal is successful.
Be prepared for the unexpected
Deal making can be a bit unpredictable and unexpected twists and turns in the process may cause a rift in plans. It is crucial that everyone is prepared for the unexpected, whether it is because of an unexpected discovery of a regulated issue, a lawsuit or another unforeseen situation. This could include having backup plans and having an exit plan in place should the plan fail to go through.
Identify the Key People
Buyers should be focused on retaining key team members from the company they are considering buying. It is common for acquirers not to retain talent, which can hinder post-acquisition growth and reduce value. It is essential to know the target’s culture and the drivers of value to ensure it is in line with the acquired company’s. This will ensure that the acquired business can continue to increase its revenue after the acquisition. It is not uncommon for an acquiring company to experience a dip in revenue after a deal, as the acquired team is focused on delivering the synergies as well as the revenue targets that were set prior to the acquisition.