Video
Covid-19 has added challenges to diligence, transactions, and other parts of the dealmaking process. Even for experienced acquirers, a new approach to M&A will be key in a post-pandemic world. Joost Spits and Mike Kühnel, partners in Bain’s M&A practice, share five steps companies can take to adjust and evolve in the changing M&A landscape.
M&A Report 2021
As the world locked down and masked up, M&A endured. Bain's third annual Global M&A Report details how companies are using mergers and acquisitions to grow.
Read a transcript of the video below:
JOOST SPITS: I think the M&A playing field has changed dramatically over the last five years. Where historically, it was more like a game of chess, it's really changed into something that resembles more of a sort of open battlefields video game, where players drop in and out and where things move at such a ridiculous pace that's honestly—all the old playbooks need to be ripped up and replaced by something that allows you to play this new and much more dynamic game.
If we think coming out of this crisis of the things companies need to do, we see five things. And the very first thing, and honestly the start of anything that an M&A team should do, is relook at the mandate for the M&A team and relook at our corporate strategy and how can M&A help accelerate, amplify our corporate strategy? What are the types of deals that we should do, and what are the kind of assets that are available?
MIKE KÜHNEL: Secondly, it's very important that you are able to do a proper assessment of your required capabilities in order to deliver the strategy. And this needs to be very broad related to your thinking. So it's not just pure M&A buy-side related, it's also relating to many different archetypes of partnerships relating to JVs, alliances, corporate venturing. So it's important to be as broad as possible in your thinking.
SPITS: And given that companies are going to be pursuing many new types of deals, they need to make sure they have the right people that they work with to pursue these deals. That might require tapping into different experts from within the business and involving them early on in the process. Oftentimes, it also involves getting some help from the outside and getting the right financial, the right legal, and then sometimes, the right consulting partners to help them.
KÜHNEL: Number four, you have to be very proactive, we believe, in developing a list of top targets right from the outset. And you need to be diligent in interacting with them, looking into them early on, understanding their situation, understanding the opportunity, and building a relationship as early as possible in order to put you into a very optimal spot.
SPITS: The last point is just recognizing that when you go and pursue these deals, there's a really important step between being interested in doing the acquisition that is due diligence. And what's important to note is that if you go after these new type of deals, there are different things to look for. You need to define a different deal thesis to test.
M&A Report 2021
As the world locked down and masked up, M&A endured. Bain's third annual Global M&A Report details how companies are using mergers and acquisitions to grow.