Any deal on businesses merger or acquisition is a major project that requires coordinated work of many specialists from different sectors. This coordination can be achieved through professional management. For this purpose, the Mergers and Acquisitions Director is engaged, a specialist capable of arranging and controlling a complicated process of the deal.
Since a procedure of companies’ mergers and acquisitions is not one of those which are often implemented even by large companies, it usually occurs there are no appropriate specialists for position of the M&A Director within the company’s team. For this reason, employees for this position are often recruited outside and among those who has necessary specialized knowledge and can assess financial aspects of a strategy.
One of the requirements for the manager is ability to detect and analyze risks, conduct complex negotiations, arrange and manage difficult projects. Therefore, companies prefer specialists who have experience in project management.
What functions does the Mergers and Acquisitions Director fulfil?
- Participation in design of the company’s development strategy: it cannot be developed without a person who will conduct a deal.
- Setting tasks for business development project leaders and managers: a specialist will be able to professionally allocate accountability areas.
- Analysis of investment projects efficiency, design, and optimization of financial models.
- Research and negotiations with companies to acquire or establish partnerships and joint ventures.
- Management of major investment and strategic business assessment projects.
- Asset valuation and participation in acquisition decision making – expert’s assistance will help to avoid knowingly unprofitable deals or agreements with pitfalls and unobvious disadvantages.
- Development of legal structure and operating model of companies to be acquired or established.
- Working groups management: experts will be in charge of coordination of departments, commissions and specially created teams’ activities.
- Management of NDA preparation, indicative proposals and SPA.
- Creation and update of internal regulations of the company: experts will arrange all matters related to the deal.
- Representation of the company’s interests before investors and consultants: negotiations is a difficult task within M&A deals.
The person who will lead a complex mergers and acquisitions process must have a set of skills, such as management, administrative, negotiation, financial, legal and analytical skills. These specialists must be capable of taking actions in an unknown environment considering specifics of different cultures and traditions. Therefore, it is a significant advantage if a candidate for this position has one or more foreign educations, and at the same time has gained experience in living and negotiating in different countries.
Stages of mergers and acquisitions
The process takes several steps, and the Mergers and Acquisitions Director leads it from scratch and up to the closing. As a rule, the specialist becomes familiar with the specifics of the business, analyses the situation, detects and assesses risks.
Then, together with the company’s senior management, the director develops a business development strategy, analyses needs and opportunities, investigates the market and outlines a range of potential interests or objects for mergers or acquisitions on the basis of capital structure, geography, industry and so on.
This is followed by initial introduction to companies from the list formed, where the interests, opportunities and limitations of the parties to the deal are described in more details. To do this, a manager must use his/her negotiating skills. This stage can take a lot of time, and the more potential negotiators there are, the longer it will take.
Once the mutual opportunities are determined, an agreement of intent and non-disclosure agreement should be signed. These agreements outline the key conditions of the deal to be concluded, and often also set out an obligation to conclude it. As a rule, one of the parties will receive some detailed information about the investment target for the purpose of comprehensive investment preparation. At this stage, the Mergers and Acquisitions Director actively engages specialists or relevant departments to fully analyze and build structure of a future deal.
Upon engagement of the experts the director analyses information obtained and plans the deal structuring. As the scope of work is enormous, and it is likely that it will involve a lot of paperwork and a number of consultations, the Mergers and Acquisitions Director engages lawyers and accountants from other countries if necessary. After that, the director monitors completion and implementation of the plan scheduled.
Contacting a consulting company
It is clear that a role of the Mergers and Acquisitions Director requires a sophisticated approach and profound knowledge. At the same time, the director bears huge responsibility. For this reason, there is a great demand for highly experienced experts or specialized consulting companies.
It is difficult to find a competent specialist to conduct a mergers or acquisitions deal, but you can address to a company that has proven its expertise in this area. The advantage of this solution is that if a consulting company conducts the deal, there will be no need to involve outside experts at all, or you will have to involve specialists for certain matters. This additionally guarantees confidentiality of the procedure and prevents from leak of information.