Jeremy Segal, EVP Corporate Development at Progress, shares strategies for closing M&A deals in 30 days. Topics include initial conversations, price negotiations, due diligence lists, deal adjustments, and confirmatory due diligence.
Quick decision-making in M&A saves time and money.
Operational synergies are prioritized over revenue synergies for post-deal success.
Understanding target company culture and workforce retention is crucial for successful integration.
Deep dives
Key Point 1: Early Deal Considerations
In M&A, the initial stages involve nurturing relationships with potential acquisitions. This involves assessing the product, go-to-market strategies, and operational efficiencies. By focusing on operational synergies rather than revenue synergies, Progress Software aims to ensure post-deal success through maintaining and retaining customer bases.
Key Point 2: Diligence and Risk Management
During the due diligence process, companies prioritize key operational aspects to make informed acquisition decisions. Progress places emphasis on must-have information, acknowledging that surprises may still arise post-acquisition. The company's approach includes maintaining a contingency line to account for unexpected discoveries.
Key Point 3: People and Culture Integration
Progress Software values the impact of people and culture in M&A transactions. They prioritize understanding the target company's culture and assessing workforce retention strategies. By emphasizing transparency and respectful treatment of employees, Progress Software prioritizes post-merger integration and operational synergies over revenue-driven metrics.
Analyzing Security Measures and Risks
Understanding prospective companies' security initiatives and gauging potential risks has become crucial in today's cyber threat landscape. Assessing previous security incidents, breaches, and cybersecurity protocols helps determine vulnerability exposure. Companies need to proactively enhance security post-acquisition to align with established standards, ensuring a secure transition and preventing future threats.
Evaluating Financial and Operational Factors
During due diligence, a thorough examination of financial aspects, legal matters, and operational efficiency is vital. Assessing customer contracts for concerning clauses, understanding potential legal issues, and analyzing marketing strategies for efficiency are key components. Furthermore, scrutinizing operational costs, gross margins, and revenue trends aids in determining synergies and operational optimizations for a successful acquisition strategy.
When it comes to M&A, time is of the essence. As a buyer, it’s best to identify whether to pursue the deal or not as soon as possible, to avoid wasting money and time. Also, if the seller is a good target company, procrastinating could lead to more competition.
In this episode of the M&A Science Podcast, Jeremy Segal, Executive Vice President Corporate Development at Progress, shares their strategy on how to close deals in 30 days.
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Episode Bookmarks
00:00 Intro 04:16 Initial conversations with the target company 08:56 Price negotiations 12:33 Preliminary due diligence list 17:05 When to ask questions 18:34 People Involved 19:10 Sales and Go-to-Market 21:02 Revenue Synergies 23:43 Customer Journey 24:26 Surprises 27:40 Customer Success 28:46 Financials 32:11 Red flags in people 32:47 Information Technology 34:28 Legal 36:48 Marketing 39:19 Breakdown of COGS 41:30 Benefits Template 42:56 Operating Expenses 43:58 General 44:58 Deal specific adjustments 45:56 Processing the preliminary diligence information 47:11 Confirmatory due diligence 50:40 Craziest thing in M&A
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