Transaction Consulting

The Harvard Business Review study cited above is a reminder that the process is not easy. There is no guarantee of success. However, by adhering to the following steps, you can increase your chances of realizing your investment thesis.

Define your goals. What do you hope to achieve with the transaction? What are your valuation expectations? How does your business compare to the market and industry? Once your  objectives are clearly defined, you can start the process on either side of a deal.

Do your due diligence. Whether a buyer or seller it’s crucially important to conduct due diligence on the target or on your business. This includes analysis and confirmation of  company financials, details of the management team, and a review of strengths and risks of the company and industry. As a buyer, a clear and accurate understanding of the target business will facilitate negotiations and align with the investment strategy. As a seller, presentation of concise information to candidates can help achieve more value and likelihood of closing a deal.

Develop a post-transaction model. Before the transaction is complete, it’s important to have a plan for the future. Buyers should thoughtfully forecast anticipated performance with scenario testing integrating the two companies. This includes measuring synergies and expected growth consistent with the transaction objectives developed at the onset. In addition, any integration concerns should be addressed early on.

Lastly, build a communications plan. Buyers should be ready to inform the market and stakeholders about the transaction. The plan should include addressing employees, customers and suppliers as well as the market.