March 24, 2025
Want to dominate your next acquisition deal?
Buy-side M&A processes present high stakes and complexity yet when executed properly they bring transformative benefits and significant value to your business. After all, strategic acquisitions lead to:
But there's a catch:
The majority of acquisitions do not achieve their intended results. Success in buy-side M&A transactions hinges on understanding and applying the core principles of the acquisition process.
This guide demonstrates essential strategies that successful acquirers implement to find and complete successful deals.
The M&A market undergoes constant changes which makes it essential for professionals to stay updated about emerging trends. Recent data shows promising activity ahead. EY predicts that U.S. deal volume will see a 10% increase which builds on the 13% growth observed in 2024.
Not all sectors are equal. The technology sector experienced a major M&A decline in 2023 whereas healthcare and life sciences sectors together with energy and natural resources sectors demonstrated a rebound. The Americas preserved their consistent portion of global M&A transactions while Europe and Asia faced considerable declines.
The most striking statistic: The most active companies that consistently engage in acquisitions achieve better total shareholder returns than their less active counterparts. The year 2023 experienced a 6% drop in strategic M&A value despite the announcement of over 27,000 deals which amounted to approximately $2.4 trillion.
Businesses which establish M&A as a fundamental organisational capability outperform those that approach it sporadically. Seeking expert advise for buyside M&A processes can help you develop this capability faster and avoid common pitfalls.
The buy-side M&A process progresses through a logical sequence where each phase develops from what came before it.
Acquirers often progress too quickly through initial stages due to their eagerness to finalise the transaction. This is a critical mistake. The success of subsequent acquisition steps depends on the quality of your strategy development and target identification.
The selection of an appropriate acquisition target stands as the most crucial phase throughout the entire M&A operation. Define specific acquisition criteria that align with your strategic objectives.
After establishing precise criteria start systematic screening through the following resources:
Acquirers who achieve the greatest success keep their pipeline of acquisition targets updated at all times. The maintained pipeline lets them react promptly to advantageous market transformations.
Pro tip: Develop a scoring tool to evaluate acquisition candidates based on your particular selection standards. By using a target scorecard against specific criteria to evaluate potential acquisition candidates you ensure objectivity in what can become an emotional decision-making process.
Keep in mind that optimal acquisition targets may not always be listed for sale. Establishing connections with prospective targets ahead of making an acquisition offer can provide you with a considerable strategic edge.
The success or failure of deals depends on the due diligence process. A complete investigation can disclose concealed assets or detect critical deal-breakers before you invest substantial resources.
Effective due diligence covers multiple dimensions:
To ensure success you need to customise your strategy based on the particular characteristics of the deal. Allocate your resources strategically to the most important areas based on your acquisition rationale.
Ensure cross-functional teams participate in the due diligence process. Finance experts analyse financial data thoroughly yet they could overlook operational challenges which industry veterans would recognise right away.
Buy-side M&A deals face significant challenges when buyers establish the appropriate purchase price for their target company. Successful acquirers typically use multiple valuation methodologies:
When evaluating acquisition targets it is essential to consider unique value creation possibilities beyond standard valuation methods. What value creation opportunities will the acquisition bring to your existing business operations?
Valuation represents a blend of scientific methodology and artistic judgment. Financial models act as the basic structure for valuation while expertise and industry understanding serve as key elements in establishing the accurate price.
This phase represents the true test of implementation success. Top-notch acquisitions collapse when integration is carried out ineffectively. From due diligence through to closing the deal, successful integration requires early planning efforts.
There are generally three approaches to integration:
Your strategic rationale will determine which integration approach you should select. When cost synergies are the main objective of your acquisition full integration probably makes sense. When the acquisition goal is innovation acquisition preserving autonomy may prove to be the better option.
Clear communication is essential. The acquisition requires employees, customers, and suppliers to understand its implications for their respective roles. When people experience uncertainty they become anxious and this results in losing skilled employees and disrupting business operations.
Buy-side M&A procedures present many challenges yet mastering them produces significant value. Your success rate will see substantial improvement when you understand the existing environment alongside following systematic procedures and applying established best practices.
Remember these key takeaways:
To succeed in the changing M&A market it is essential to keep abreast of current trends. The projected 10% increase in total U.S. deal volume creates many opportunities for buyers who enter the market with a strategic approach.
Are you prepared to dominate the buy-side M&A process so you can become one of the successful acquirers who build value through strategic acquisitions?
