The Personal Motivations Behind Mergers and Acquisitions

While my work centers mainly around the technicalities involved in mergers, acquisitions and sales, every so often I will begin to suspect that something is being left off the table. The strategic advantages of this or that transaction are clear as day, however, I find that the buyers and sellers are either avoiding or misunderstanding their personal motivators behind the moves. These issues can become sticking points upon which certain decisions revolve, so it becomes beneficial to coach my clients through a handful of self-directed questions, the answers to which serve to shed light on the best directions to pursue.

The primary question is “What do I hope to achieve from this transaction?” The easy answer is always something along the lines of “gain competitive advantage” or “leave the best legacy possible” or “pursue another direction.” These answers, of course, generally leave admirable equations the paperwork, although sometimes the truer answer will make the calculations different.

Buyers and sellers are well served to allow themselves to consider what they really want in terms of:

Personal financial goals - the lifestyle those numbers are intended to support, be it retirement or further growth of wealth.

Desired family involvement - whether for business succession or specific bequests in the planned legacy picture.

Desired personal involvement - such as changing title and duties or perhaps leaving the industry altogether.

It is enlightening how often the opportunity or the demand to spend time looking for and honoring personal motivations will alter the shape of the bigger picture. Ultimately, a successful bottom line will satisfy only so long. If the internal goals are not figured into the outcome, the disparity will emerge in some way, further down the line. An unhappy or stressed out director or partner or manager will create friction at some point in the machinery.

In market conditions that increasingly demand foresight, agility and timing, personal clarity - while sometimes uncomfortable - is crucial for precision in producing the whole transaction. There is enough in the economy that cannot be controlled or prognosticated. Full internal engagement will only enhance the possibilities of success in every way.