The first half of 2016 has seen healthy levels of M&A activity in the software tech sector, with some major deals taking place amid a great deal of razzmatazz and attracting tremendous publicity. SME’s too have participated in a significant proportion of the sector’s total M&A events, though without the fanfare.For such organisations, those without their own M&A team in-house, when seeking an exit, it is imperative they choose the right M&A partner to guide them through the morass of M&A red tape and potential stumbling blocks.
So, to the purpose of this short article – During our years spent facilitating M&A events for our clients in the software tech sector, we have met with just about every obstacle and impediment to successful outcomes. Most of these we have been able to overcome by careful thought, followed by negotiation. Sadly, we have also encountered some so-called experts - “Investment Bankers”, Boutique M&A firms and M&A Brokers - who have made us really MAD!!!
Throughout almost two decades, we have heard some real horror stories about some of these “M&A experts”; some that we have witnessed first-hand, others that have been reported to us by clients who have been taken through a highly unsuccessful M&A sales process. Some of the horror stories involve large organisations who can boast many sales on their website due to the number of companies they engage with but their true success rate tells a very different story.
Some of the bad practises we have witnessed are breath taking. Sometimes, it is simply due to ineptitude and/or a lack of understanding of this sector. However, of far greater concern, are the actions taken, which are quite simply plain, sharp practise. Whatever the intention or cause, the result is the same: SME’s in this sector suffer.
If your company is looking to acquire or to be acquired, BEWARE!!
We list below a few of the many unprofessional actions undertaken by so-called M&A experts:
- Taking on assignments and then leaving the client to do most of the work
- Winning the business by deliberately setting false expectations
- Setting inflated valuation expectations and/or overly optimistic timeframes
- Telling the client what (the broker thinks) they want to hear
- Inability to articulate the value proposition because they don’t understand the client’s business
- Shotgun approach to target buyers/sellers and not understanding the sector well enough for the sale process to remain confidential
- Approaching the M&A transaction from a purely accountant’s view
If you are considering making an acquisition or are planning to sell your business, please talk to us early in the cycle.
We cover North America, Europe and the Asia Pacific regions and focus specifically on the software technology sector.
We pride ourselves on greatly reducing the risk of failure of your M&A transaction and will always give honest feedback on your objectives; never BS.
If you would like a confidential, one-to-one call to discuss your M&A plans with a senior executive, please fill out this quick form. We promise not to be shy in expressing our opinion : ))
About Bossequity
by Isabel Ross-Edwards
