Increase Your Firm's Chance of a Successful Acquisition

And the survey says: 4.1.

A recent study conducted by consultant ZweigWhite of Natick, Mass., revealed that respondents ranked the success of their most recent acquisition a 4.1 in achieving their strategic goals. ("One" equaled least successful; a "six" represented most successful.)

"This rating is the lowest since 2000 and suggests that more attention and analysis may be needed throughout the planning, courtship, diligence, and post-deal integration processes," says Steve Gido, CFA, a ZweigWhite principal who specializes in financial advisory services.

Gido said firm leaders who want to avoid common A/E transaction pitfalls should:

• Develop a focus. Successful buyers have done their competitive research,debated M&A ideas and desires within their organization, and documented their clear, articulated goals within the framework of their strategic plan. Once an acquisition plan is created only seek out and meet with firms that will help to achieve these goals.
• Don't fall in love. Don't concentrate on the positives of a potential deal so much that shortcomings are ignored. Have a disciplined (but not rigid) due diligence and valuation approach to determine when to walk away.
• Retain the seller's key staff. The deal value will be significantly diminished if key employees leave. Keep talented individuals motivated by identifying mid-level and junior professionals, in addition to senior-level staff, and offer the potential of enhanced career opportunities, benefits and bonus upgrades, and client synergies that can result from the deal.