M&A activity has been on a roller coaster high in 2017-2018, with some of the biggest names in the business betting their all AT&T, General Electric- Baker Hughes (Reuters), Sprint-Tmobiles… to name a few. This roar brought some landscape changing solutions to the table.
There has been a change in the way the M&A checklist is being checked, or the order of checking, or the approach to go about the deal. On this very table, we have seen many deals fizzle out, and many reach the crest. Would 2019 be on a similar high?
Among the NewYear-NewMe’s, how about having NewYear-NewM&A?
Have you tried juggling? Only 21 % of the people can juggle. And 1% of M&A deals juggle.
Juggling in M&A is like this: when you juggle, you entertain stakeholders by tossing them phases into the air, catching them and tossing again, so that there are several of them in the air at the same time. But you maintain balance and continue the act till everyone applauds you, i.e., create significant value.
In a real-time M&A deal, there are at least two people involved. Let’s call them A and B, A handles some phases of the M&A deal, whereas B handles the remaining. As and when A completes a particular phase, he passes it on to B, and vice-versa.
This continues until they’ve created momentous value.
In every deal… timing, coordination, calm, precision and response, are important. There are many other aspects which we can incorporate from juggling:
- Skill level is necessary to escalate proportion to the number of balls being juggled
Experience is everything, you have to be experienced or hire the experienced
- More balls – More error- More scope of correction
This draws back to experience, with experience comes wisdom, and the ability to drive synergy.
The point being- flagging potential loop-holes that may arise in a particular phase, even on the basis of a premonition.
- The rhythm used by jugglers show two points of interest:
1. Limbs of the body move with the same frequency of the ball
2. The ratio of (the time the ball spends in the hand) to (the time between two throws) could be equal to the Dwell Ratio(2:3)
M&A also has rhythm; it always starts with prospecting and ends with synergy creation.
Every phase has its own rhythm, it’s important to understand and catch the frequency of operation. And finally, optimize operation to drive to a frequency that matches synergy and value creation. Usually, this happens when the deal is timed and is on-time, which is in turn reflected in the progress of the phases, and the deal.
Keep the time to toss the ball and pass-receive the ball in a 2/3 ratio. That is, let the time you take to complete a phase be 2x, and the time is taken to pass or receive be 3x.
- Errors in the throw of each ball must be anticipated in the catch while concentrating on the other balls.
As A processes and passes a phase to B, B must go through the documents to scan for errors (risks or issues) that may arise and highlight them, while working on the other phases simultaneously.
Studies report that it takes 4 to 6 months to master the art of juggling and it takes a few seconds for Google to find you a platform that integrates every aspect of the M&A deal so that you can juggle. In the digital age, a digital approach to M&A would drive deals to synergy and prodigious value-creation.
We can’t be pro-jugglers for now but we sure can try not to drop the ball.
Catch the ball! Catch the synergy! Get in touch with us @mergerware.com