Each M&A agreement is a system of incentives and compromises between the parties, which devote a significant amount of human and material resources to its preparation and implementation. However, not every agreement reaches its logical conclusion. So, how to raise deal closing effectiveness?
What is an agile approach for M&A deals?
In the current economic situation, mergers and acquisitions (M&A) of companies are one of the most common ways of development, one of the main growth strategies that even the most successful companies resort to, including many transnational corporations, thereby ensuring the globalization of economic activity in various sectors of the economy. Therefore, the reorganization process in the form of M&A deals is currently gaining momentum and becoming commonplace. Every day more and more enterprises, trying to increase their scale, save costs and obtain synergies, choose the M&A strategy that allows them to maintain their existing market positions and become leaders.
Any transaction is aimed at increasing profits. But statistics show that 60% of traders do not achieve this goal, and some entail serious losses. Therefore, the right choice of an M & M&A strategy allows you to achieve growth in performance and significantly reduce risks when a business is taken out of a difficult situation.
The analysis of M&A “failures” showed that they are mainly due to errors in developing strategic plans, incorrect assessment of potential and synergies, and shifts in project implementation. The process of implementing the function of M&A transactions is almost the same for everyone and, as a rule, includes several consecutive steps, each of which has a specific goal. To conduct an effective transaction from all points of view, careful study of all its stages and an agile approach are necessary.
Virtual data room: how to raise M&A deal effectiveness?
Secure collaboration in a particular transaction is one of the main requirements of the owners for organizing a transaction. Maintaining the confidentiality of information during the transaction is an integral factor in its success. The professional approach to managing the transaction process is to disclose information gradually. Any disclosure of information, starting with the disclosure of the company’s name that initiated the transaction, is accompanied by the signing of an appropriate confidentiality agreement. As you move through the stages of the M&A transaction, the detail of the information provided increases, and the circle of its recipients narrows. The associated risks of disseminating unnecessary information are minimized. In solving the problem of ensuring confidentiality, the cloud-based virtual data room has an undeniable advantage.
Data rooms offer clear and structured step instructions. It saves you complicated self-structuring and processing in often several software applications. It is not only cheap in terms of time, but also makes a significant contribution to avoiding errors. In addition, a customer-friendly advantage of such a platform is the adaptable application possibilities outside of M&A transactions.
This software performs the following functions that are essential for raising M&A closing deals effectiveness:
- document management: check-in/check-out, version control, security, document grouping, etc.;
- collaborative work on common documents and support of project teams;
- document scanning and paper document image management;
- records management for long-term archiving, automating retention rules and regulations, ensuring that records comply with laws and regulations;
- workflow for business process support, content routing, assignment of work tasks and states, route tracing, and execution control;
- web content management for publishing automation, dynamic content management, and user interaction for these tasks.