mergers and acquisitions – Dispatches From The Front

Last year saw a boom for mergers and acquisitions — a stunning 139% increase in the U.S. compared to 2020. Deal volumes broke records with $5.8 trillion worth of M&A activity in 2021, driven primarily by digital transformation, access to capital, a recovering global economy and labor shortages. This “supercharged” M&A environment will likely continue in the foreseeable future.

Perhaps not surprisingly, technology and telecommunications deals accounted for nearly 20% of M&A activity last year, including more than 2,000 media-related deals worth $189.7 billion. Notable major transactions included AppLovin acquiring MoPub, Microsoft acquiring both Xandr and Nuance, and Integral Ad Science buying connected TV advertising platform Publica, along with other multibillion-dollar deals.

Selling a company is often difficult and time consuming. The mergers and acquisitions (M&A) process is one that requires careful planning, competent professionals assisting the target company, and an understanding of the deal dynamics involved in the negotiations. CEOs and companies that have not been engaged in many M&A transactions frequently make mistakes that can result in a less favorable price or terms that would have otherwise been obtainable —or even kill the deal altogether.

The following is a list of common mistakes made by private companies attempting to sell themselves:

1. Not being prepared for the extensive effort and time the deal will take. Successful exits through M&A are not easy. They are time consuming, involve significant due diligence by the buyer, and require both a great deal of advance preparation as well as a substantial resource commitment by the seller. Acquisitions can often take 6 to 12 months or more to complete.

Tag: mergers and acquisitions

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