A successful deal is a win for both parties, and can be measured in a variety ways. Each deal is unique, but there are some characteristics every successful partnership should possess.
Before you sit down at the negotiation table It is crucial to prepare thoroughly. This includes researching the market landscape and identifying potential synergies. It is also important to understand your counterparties’ goals, priorities, and motivations. Understanding the viewpoint of the other party can give you an advantage and will ensure that your deal is a success.
Deal making can be unpredictable and unexpected twists and turns in the process are often able to cause a rift in plans. It is vital that everyone is prepared for the unexpected, whether due to an unexpected finding of a restricted issue, a suit or other unforeseeable situation. This could include having a backup plan as well as an exit strategy should the plan fails.
Buyers should consider retaining the most important team members of the company they are considering buying after the sale. It is common for acquirers to not retain talent, which can slow growth post-acquisition and decrease value. It is important to be aware of the target’s culture and values to ensure that it is in line with the acquiring company’s. This will ensure that the business acquired will continue to grow its revenue, even after the transaction. It is not unusual for an acquiring firm to see a drop in revenue following a transaction. This is due to the fact that the team that was acquired is focused on achieving the synergies and revenue targets set before the acquisition.
