Building an effective M&A deal team

May 2025  |  SPECIAL REPORT: MERGERS & ACQUISITIONS

Financier Worldwide Magazine

May 2025 Issue

M&A is a unique exercise within a corporation. There are few other processes that combine high risk and reward, short timeframes and the need to pull the vast majority of resources from outside the core expert execution team. This creates an unusual challenge for corporate development leaders. They need to drive a process where much of the work is done by people outside their team, and even outside the company.

Corporate development teams are tiny by comparison to the surrounding organisation. Even the largest corporations in the world often have corporate development teams that are 10-20 full-time equivalents or smaller. Often, corporate development is less than 0.01 percent of the total headcount of a larger company. At the same time, the effective execution of an acquisition requires a wide range of expertise. And it must be executed quickly and highly effectively. Acquisitions are high-stakes exercises where a large amount of corporate capital is deployed in a single irreversible transaction. And even beyond that capital, acquisitions can be a huge distraction to a business, not just in the lead up to the deal but for months and even years after the deal is done.

To execute any M&A transaction, the corporate development team needs to effectively incorporate several different internal and external teams. A successful M&A execution team will have not only an expert corporate development dealmaker, but a mix of internal and external teams with a range of skills. Internal ‘enabling area’ teams that need to dedicate resources include finance, human resources, compliance and legal. In addition, resources from different parts of the core business team are generally needed, including product, technology, sales, marketing and pricing, and services and delivery. When acquiring a business that will be standalone within an organisation (usually when entering a new business, product or market) an acquirer will still need internal expertise from these areas. More commonly, the target business gets integrated into an existing business unit, in which case these teams are needed not only for diligence insights but also for integration planning. These internal resources are usually complemented with external vendors, including legal, finance (often for diligence or quality of earnings analysis), technology, other diligence expertise (depending on the nature of the target and the ‘absorbing’ business unit) and investment bankers and deal advisers.

Building the team

There are several key lessons to effectively constructing and operating this blended team of corporate development, internal and external resources.

Begin by assembling the team well in advance of active diligence and integration planning. This is always a timing challenge since a buyer will not want to hire or pull these resources until it knows a deal is likely to move forward. But identifying and ‘ringfencing’ these resources early, or even in advance, of the deal process is critical. Once a deal ‘goes live’, the first step is to assemble the team and provide critical context.

The corporate development team needs to provide clarity on roles and responsibilities to everyone on the team. This is particularly critical to members of the team that are not deal professionals. The basics of how a deal process works and the goals and purpose of each component in the process should be laid out for everyone. Do not underestimate the need to explain things like why the deal is being done, why due diligence is necessary and why integration and integration planning are essential.

It is also critical to provide clear deliverables since the majority of the team may not understand what they need to deliver and when. Templates and examples will go a long way to avoiding confusion. If the buyer does not have models of diligence reports and integration planning documents, it should create them and customise them to the need of the specific deal. Similarly, it should provide the whole team with as much context for the specific target as possible. Financials, product demonstrations and organisational charts and technical architectures are all important documents for the team to review in advance of launch. And a group kick-off (after material is reviewed) call or meeting is an important mechanism to make sure questions are answered before work begins. This also sets the stage for bringing the group together as a seamless team.

Command and control is an important topic to hit early and directly. The corporate development team does not ‘control’ most of the resources it needs to deploy. Vendors may or may not view corporate development as their ‘client’. And the majority of internal members of the team do not view a deal as their ‘day job’. So, the buyer cannot assume that the team it has assembled will be aligned on the importance and priority of the work they are doing for a deal. Direct conversations with the leaders allocating these resources and the vendors are important – to make sure the time and priority commitment needed to execute the deal are in place. And the buyer must be willing to have hard conversations with leadership at the beginning of the process if it spots gaps in expectations. Additionally, some of these resources will need to be engaged well beyond the closing of the deal, in the most important component of any deal – post-deal integration.

Running the team

Rapid relationship building is also a critical element of a successful deal. The various teams and vendors do not operate in a silo. They need to interact with each other, feeding information and insights back and forth in a rapid and transparent fashion. For example, insights on technology diligence can be critical feeders into financial modelling and budgeting, legal representations and warranties, and integration planning. This is an unnatural situation, where a disparate group of people from different specialties, levels and organisations, have to come together very rapidly into a cohesive and aligned team, in a very high-stakes environment.

Particular attention should be paid to relationship building between internal teams and external vendors who may not know each other and do not even have the benefit of coming from the same organisation and corporate culture.

As the deal heats up and progresses, it is very important to maintain transparency and ongoing communication between the different members of the team. In the absence of strong existing relationships and work rhymes, formalising that communication is the best way to make sure it happens. This includes giving relevant team members access to works in progress. Regular short touch-bases are another tool to make sure that information is not falling between the cracks.

While setting up team data rooms and scheduling regular stand-up calls may seem overly prescriptive, for a deal that is moving fast and a team that has varying levels of experience with the deal process, it is not only appropriate but essential. We live in an increasingly virtual world where most business conversations are had over email, direct messaging or videoconferencing. However, in a deal environment, live meetings and working sessions, where possible, are a powerful tool to accelerate relationship building and team integration. In the context of a massive and risky ‘bet’, travel expenses and time are a worthwhile investment.

It is not over until it is over

The day the deal closes is exciting and satisfying. But it is just the beginning. While some members of the deal team will ‘roll off’ quickly (many of the outside vendors and those focused on confirmatory diligence topics), many need to remain engaged for weeks or months on executing the integration plan. Continuity from diligence and integration planning into post-deal integration execution is critical. Team members that have become overnight experts in the target and how it will be integrated have unique insight that needs to be maintained in the integration process. An ongoing governance, communication and management process needs to be in place for post-deal integration. This includes templates and mechanisms for reporting, approval and the inevitable pivots and changes – no integration plan fully survives post deal.

Acquisitions can be an amazing tool for accelerating growth and driving exponential value to a company. But they are also inherently risky efforts with massive downside potential. Investing effort, focus and planning in building, integrating and running a team with the right skills and expertise can have a huge impact on the outcome of a deal.

 

Michael Frankel is the founder and managing partner of Trajectory Capital Partners.

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BY

Michael Frankel

Trajectory Capital Partners

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