Venero Capital Advisors’ Post

Don't launch an M&A process unless you have a strong understanding of the three pillars that underpin successful M&A transactions. 🥇 The second(*) most important determinant of value in M&A is timing. Timing is key for most things in life, but certainly for M&A. 🤔 Consider selling your company in December 2019 (pre-Covid) vs. April 2020... Or Jan 2022 (stock market peak) vs. March 2022 (stock market collapses by 50%). Just months later, a world of difference. There are two types of timing: - timing you can control - timing you cannot control 🤷♂️ Market timing, you cannot control. This is the first pillar of value maximization, and it includes any market tailwinds / headwinds, buyer / investor sentiment and broader industry / competitor dynamics. 💪 Then there is Company timing. This, you can control. It is the second pillar, and includes the KPI's of the business (are they trending in the right way), the size of the company (are you happy with where you are, or do you want to grow more), shareholder objectives / expectations (is everyone in agreement on what they want), etc. 🤞 Ideally, market timing and company timing will be aligned. This is optimal. In any case, you should understand both. 🌐 The buyer universe is the third pillar of M&A value maximization. Here, you need to understand the types buyers that could be interested in acquiring your company, the strategic rationale that will motivate them to explore a transaction, the level of diligence they are likely to undertake in order to assess your company’s appeal, as well as the valuation multiples they are likely to offer. 👉 Contemplating M&A? I'm Managing Partner at Venero Capital Advisors, the world's #1 ranked investment bank for #HRTech and #WorkTech businesses. Drop me a note or schedule an appointment and we can help you assess your options. (*) If timing is the second most important factor in M&A, what is number 1? It's who is sitting at the other side of the negotiating table. Talking to a highly motivated buyer trumps all else. #mergersandacquisitions #corporatefinance #investmentbanking #hrtechnology #futureofwork #valuations