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differentiate themselves and come to the table with one or all the following: Information on previous closings and tangible results. They will often provide revenue figures of their previous acquisition partners before and after the merger to display tangible results that come from partnering with them. They will also invite founders and executives from their previous acquisitions to the conversation to discuss any considerations that should be addressed when exploring the opportunity. If your firm doesn’t have acquisition experience, you can show revenue figures that display the promising trajectory your firm is currently on. An understanding of how both firms can make “1+1=3.” How can the personnel, disciplines, finances, operations, etc., of the buyer complement those of the seller in a way that allows both firms to be more competitive together than they were individually. Can your firm offer certain services in-house that the target is currently subbing out? Do you have established recruiting channels or refined onboarding processes that can help them acquire talent that would have been unavailable to them otherwise? The right tone. Often, less experienced buyers will find themselves spitting off questions to their target as if it is an interview. Remember you’re the one who reached out and asked to have this discussion, and this means that it’s on you to sell the opportunity to the target. Absolutely do what probing you need to do in order to determine whether or not this is the right fit for your firm’s goals, but make sure that a fair amount of time is spent pitching your firm and the opportunity at hand. The target should leave the conversation excited for the next, and a potential next chapter for their firm, not wondering whether or not their answers satisfied you. This list is certainly not all-encompassing, but these are some of the main habits and characteristics I’ve picked up on while working with some of our industry’s more experienced buyers. Click here to learn more about Zweig Group’s M&A advisory services. Andy Chavez, CM&AA is an advisor within Zweig Group’s M&A advisory services team. Contact him at achavez@zweiggroup. com .
ANDY CHAVEZ, from page 1
very least, give the illusion of experience. Time is of the essence in M&A deals, and if the buyer must slow down a conversation or put it on hold for several weeks while finding legal support or any form of outside counsel, this is only inviting the potential for cold feet and putting a potential lack of experience on display. If intending to seriously pursue acquisitions as a growth strategy, make sure to have your roster set before hitting the field. 3. General responsiveness and networking capabilities. Everyone is busy and feels like they hardly have time to respond to M&A opportunities. If a firm is serious about acquiring, they should be responding to every M&A sell- side opportunity received. Even if many opportunities are not a viable option for the firm’s strategy, they should take the time to refine the M&A advisor’s understanding of what they are looking for, so they are able to vet for better suited opportunities moving forward. Eventually, the buyer will have a network of professionals who know what they’re looking for and will happily send strong candidates for consideration. Take the time to network and allow these people to work for you. 4. Clear growth strategy and acquisition criteria. I have had the opportunity to work with many of the AEC industry’s most experienced buyers, and they always come to the table knowing exactly what they are looking for in an acquisition partner. They know what fits their strategy in terms of margin, geographic location, client type, and disciplines offered. These firms often leave an introductory call knowing whether there is a strategic fit that is worth exploring further. Less experienced buyers will often find themselves trying to rationalize how they can make an acquisition work, while experienced buyers are able to determine whether a candidate fits within their established strategy. 5. Unique value proposition. Experienced and successful buyers know how to entice the leadership teams of acquisition candidates with a value proposition that piques the target’s interest. If the target is entertaining the idea of merging with your firm, there is a strong chance they’re fielding interest from several other buyers. You can bet these other buyers also “prioritize company culture” and “offer competitive multiples and a flexible work-life balance post-close.” Experienced buyers know how to
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THE ZWEIG LETTER SEPTEMBER 12, 2022, ISSUE 1456
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