For most technology and services companies, acquisitions are an important part of their growth strategy. However, corporate M&A is often an inefficient, reactive process with limited resources and infrastructure. With a dramatic increase in M&A activity and the growing footprint of large private equity funds, the “War for Acquisitions” is increasing in its intensity. Wall Street continues to ratchet up growth expectations for successful companies, and M&A is one of the most effective ways to show growth in revenue and earnings in a short period of time. M&A deals can be incredibly impactful in today’s environment where innovation and time-to-market timelines are compressed. The companies that continue to view their acquisition programs passively are at a distinct disadvantage to their competitors and the often-nimbler private equity buyers. The War for Acquisitions is on – it’s time to get proactive.
We are challenging the traditional corporate development methodology and are looking for more creative methods of finding growth through M&A. A natural place to begin is with what we call the M&A Brand.
Product brands have been around for hundreds of years. Companies spend billions of dollars annually proactively defining their product brands. More recently, companies have turned their attention to proactively defining their employment brands in an effort to win the war for talent in today’s low unemployment environment for skilled workers. For M&A, the same rules apply. M&A Branding is a targeted, long-term strategy to manage the awareness and perceptions of potential acquisition targets, channel partners, intermediaries and related elements of a company’s ecosystem. Establishing an M&A Brand is critically important for companies to succeed in the War for Acquisitions.
The challenge is real and the stakes are rising. How many acquisitions have your competitors announced that caught you by surprise? How many times have private equity firms poached what should have been an accretive acquisition for your company with clear synergies? Why are deals happening with companies you didn’t know were for sale?
At the same time, M&A has become much more competitive in an increasingly efficient marketplace. Long gone are the days of “hidden gems” in the market. With the incredible reach of the Internet, it is easier than ever to identify the players in a market and gather information on businesses. New players, such as private equity firms, have entered the market with a proactive approach to M&A. They have legions of freshly minted MBAs calling into all your acquisition targets to gather information on the companies and the competitive landscape. Recently, with the strength of the debt markets, we have experienced several examples of private equity firms outbidding strategic acquirers in an auction process – something that was exceedingly rare just five years ago.
What does this all mean for the C-suite of leadership? As competition for acquisitions intensifies, becoming the “Acquirer of Choice” in your market segment is a strategic imperative. The boldest acquirers have proactively defined and promoted their M&A Brands, an area that for many others has been under-invested for years.
What is an M&A Brand?
The M&A Brand is an identity at the center of both internal and external forces. It is a blending of the corporate brand with the corporate development track record, both real and perceived from an external perspective where other deals impact sellers’ perceptions. Graphically, the M&A Brand is at the center of a collection of influences as perceived by the marketplace, often with imperfect information most often caused by a company’s lack of attention.
Perhaps a better way to define what we mean by M&A Brand is to outline steps to take in establishing it. Based upon leading practices we’ve observed, we’ve identified the following five straight-forward steps you can take to move your M&A Brand forward.
Five Ways to Establish Your M&A Brand
A Strong M&A Brand Supports The Win
M&A Branding is a solution to the challenging forces facing companies that are looking for growth and innovation through acquisitions. Because its very nature is outward facing, M&A Brand building helps to continuously challenge the organization’s thinking in new and enlightening ways. The M&A Brand is an extension of corporate branding efforts and helps to magnify the company’s presence in its ecosystem from customers to competitors. If properly resourced and prioritized, a strong M&A Brand, when combined with a disciplined and well organized corporate development process, will put you in the pole position for any quality acquisition candidate. It is a great place to be when the next game-changing opportunity comes along.
Furthermore, if you let your competitors define your M&A Brand, they will not be kind. Enlist the help of your marketing department and build an M&A Branding strategy. Be proactive. Tell the world why your company is a perfect landing spot for smart, innovative entrepreneurs and their employees and customers. It will save you a lot of time and effort later, and may be the difference between “Congratulations!” and “How did we miss that deal?”
DISCLAIMER This presentation is intended for information and discussion purposes only and does not constitute legal or professional investment advice. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of Harbor View Advisors, LLC (“HVA”). The information in this presentation was compiled from sources believed to be reliable for informational purposes only. HVA does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.
