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The anatomy of a successful M&A team: Who you need and why
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The anatomy of a successful M&A team: Who you need and why

na M&A

Amidst the global expectations for the upswing in M&A deal-making activity, let’s delve into factors that help deals succeed. In this article, we focus on the mergers and acquisitions deal team as an integral part of a successful M&A execution process.

What is the M&A department structure? What M&A roles do those specialists perform? How can the most common challenges of building an effective M&A team be handled? Find all the answers in this article. 

Understanding M&A teams

The M&A deal team is a group of specialists responsible for the transaction’s execution, coordination, and closure. 

This team typically includes professionals from different industries and business areas with diverse expertise to handle various aspects of the deal, ensuring a comprehensive and well-coordinated process. 

Importance of mergers and acquisitions deal teams

Each specialist on the M&A team structure of merging companies plays an important role in leading the deal to success: from initial strategic planning stages to the due diligence phase and post-merger integration.

Among the top benefits that a well-coordinated and efficient M&A deal team brings to the transaction are the following:

  • Expertise and specialized knowledge

M&A teams bring together professionals with specialized knowledge in finance, law, tax, M&A tools, and industry-specific insights. Their expertise and area-specific skill sets ensure that all aspects of the deal are competently managed, from choosing the business valuation model to handling legal compliance.

  • Improved project management

Effective project management is mandatory for successful deal execution since it helps to coordinate multiple stakeholders, manage timelines, and effectively allocate resources. M&A teams ensure that all parties are aligned and work towards common objectives. They track progress and promptly address issues that arise. This structured approach keeps the transaction on schedule and within budget.

  • Enhanced collaboration between the two companies involved

The M&A department facilitates better team collaboration between two organizations by managing cultural differences and establishing clear communication channels. This is especially important considering that insufficient communication often leads to problems when combining two organizational structures into one. That’s exactly what happened between the Daimler and Chrysler merger in 1998, which resulted in the failed deal.

  • Strengthened accountability

Having a well-coordinated team involved in the whole process of deal execution means that everyone knows their area of responsibility and is accountable for it. They track performance against milestones and objectives, ensuring tasks are completed effectively. And regular reporting and thorough documentation help maintain transparency. This, in turn, facilitates deal success.

Roles in an M&A team: 6 key groups

Among all the specialists involved in the deal, we define 6 main stakeholder groups that comprise an M&A team structure. These groups can be divided into those responsible for the leadership in the merger process, those in charge of its execution, and those that perform an advisory role. 

Learn more about each of these groups and roles below.

Area of responsibilityStakeholder group
Leadership
  • C-suite and investment committee
  • Business unit leadership
Execution
  • Corporate development
  • Transaction lead
  • Integration management office
Advisory
  • External advisors

1. C-suite and investment committee

This group typically consists of the CEO, CFO, and other top executives, along with members of the board or a dedicated investment committee. It’s also often referred to as an executive team or steering committee. 

An executive team is the most influential constituent in the decision-making process. What’s more, 36% of dealmakers believe that the lack of strong senior management can lead to deal failure. 

Among the top responsibilities are the following:

  • Assessing the strategic fit with a potential target business and possible synergies of the deal
  • Approving the allocation of resources
  • Setting financial and strategic objectives
  • Ensuring that the transaction aligns with the company’s long-term goals
  • Driving the effective collaboration between two businesses

2. Business unit leadership

The business unit is typically accountable for operating the new organization after the deal completion, meaning it’s more involved in the latter stages of the transaction. However, they’re also often engaged in the early phases of the deal, which ensures alignment with strategic objectives.

Business unit leadership is mostly responsible for the following aspects of the deal execution:

  • Providing critical operational insights
  • Ensuring that the deal aligns with the practical realities of the business
  • Assessing the potential impact of the deal on the business operations
  • Identifying areas for growth after acquiring a target organization
  • Monitoring actions of competitors 
  • Advising the executive team on when it’s a better time to act

3. Corporate development

The corporate development team drives the M&A process and is responsible for identifying, evaluating, and executing potential deals. The corporate development team is typically involved in each stage of the deal. Additionally, it plays a key role in aligning the transaction with corporate strategy and ensuring a smooth execution.

Specialists from the corporate development department interact with potential targets most often. That’s why they have a thorough understanding of its organizational structure and potential synergies it might bring to the new firm.

The wide range of responsibilities includes the following:

  • Developing and managing the M&A pipeline
  • Conducting market research and screening potential targets
  • Performing preliminary valuations
  • Completely managing the due diligence process
  • Developing deal structures and preparing the necessary documentation
  • Preparing for bidding and negotiation

Additional read: Learn more about typical M&A salaries in our dedicated article.

4. Transaction lead

The transaction lead, often a senior member of the corporate development team or a dedicated M&A specialist, is the specialist who oversees the day-to-day management of the deal process. This individual acts as the central point of contact, coordinating efforts across all involved parties and ensuring that timelines and milestones are met.  

Typically, a transaction lead is most involved in the finalization of the deal and further integration of an acquiring company and a target. However, it’s recommended that a transaction lead engages in the process earlier, since he or she can significantly help identify challenges, risks, and opportunities of the specific potential deal.

The key responsibilities include:

  • Managing due diligence
  • Facilitating communication between internal teams and external advisors
  • Addressing any issues that arise during the transaction

5. Integration management office (IMO)

IMO is completely accountable for the post-merger integration process: from the planning stage to its execution. Their role is crucial in maintaining business continuity, managing change, and ensuring that the combined entity operates effectively from day one.

Specialists from the integration management office work closely with business unit leaders and other stakeholders to ensure a seamless transition, mitigate risks, and realize expected synergies. Though the transition comes only after the deal completion, the PMO is involved in the process early, since the integration planning starts early as well. 

The IMO team responsibilities typically include:

  • Developing detailed integration plans
  • Covering aspects such as organizational structure, systems and processes, and culture
  • Ensuring smooth communication and transparency between all the stakeholders at each integration stage
  • Handling cultural integration and ensuring retention of key employees 

6. External advisors

Besides internal teams that are actively involved in the M&A process, deal sides also hire outside specialists and advisors who can share their expertise in specific areas. Such specialists typically include:

  • Attorney or legal counsel

Legal advisors typically provide essential legal advice, ensure compliance with relevant laws and regulations, and draft and review contracts and agreements. They handle due diligence, mitigate legal risks, and help negotiate the legal terms of the transaction to protect their client’s interests.

  • Financial analyst or advisor

Financial advisors assess the financial health of the target company, provide valuation services, and analyze the financial implications of the deal. They assist in structuring the transaction to maximize financial benefits and may also help in securing financing if required.

  • Wealth manager or advisor

Wealth managers or advisors help individual stakeholders, such as business owners, understand and manage the personal financial impact of the M&A transaction. They offer guidance on tax planning, investment strategies, and long-term financial planning to optimize the personal financial outcomes of the deal.

  • Investment banker

Investment bankers facilitate the whole M&A process by identifying potential targets or buyers, advising on deal structure, and assisting in negotiations. They provide expertise in valuation and market analysis and often help with capital raising to finance the transaction.

5 tips for building an effective M&A team

An effective and well-coordinated M&A team is one of the deal success factors. To facilitate the success of your transaction with the help of a high-performing deal team, we recommend following these tips:

1.
Look for diverse skill sets

Ensure the team includes members with different expertise, such as finance, legal, operations, and strategic planning. This diversity allows for efficiently addressing industry-specific areas of the deal and boosts decision-making during the M&A process.

2.
Clearly define roles, responsibilities, and reporting lines

Assign specific roles and responsibilities to each team member and establish clear reporting structures. This clarity helps in avoiding confusion and ensures accountability throughout the whole M&A process.

3.
Provide strong leadership

Strong leadership is essential for maintaining efficiency and clarity of all the processes during the deal execution. Appoint a competent leader who can guide the team, make critical decisions, and keep the project on track.

4.
Establish transparent communication

Establish an environment of open and honest communication among all team members. This transparency helps in identifying and addressing issues promptly, ensuring that all specialists are aligned and informed.

5.
Ensure training and development.

Invest in the continuous training and development of team members to keep their skills up-to-date and relevant. This ensures that the team is capable of handling unexpected challenges and complexities that arise during the M&A process.

Challenges in M&A team dynamics

Now, let’s briefly look at what obstacles can occur within the M&A team and how they can be handled.

Conflicts within the team

Often, team members may have different opinions on the strategic direction of the merger or acquisition. Additionally, when M&A specialists come from different organizational levels, backgrounds, and, even more importantly, corporate cultures, it can often result in conflicts when striving for decision-making. 

How to solve it?

  • Ensure clear role definition

Clearly define each role and their area of responsibility to avoid power struggles and confusion.

  • Provide specific conflict resolution mechanisms

Develop and communicate clear processes for addressing conflicts, including mediation and escalation procedures.

Communication gaps

When different specialists from the acquiring company and the target form one M&A team, they typically come from different locations and time zones, often speak different languages, and can have completely different approaches to deal management. At this stage, communication gaps often appear, leading to corporate clashes.

How to solve it?

  • Ensure transparent information sharing

Create a centralized repository for all relevant documents and updates that all team members can access.

  • Provide regular updates

Schedule regular updates and meetings to ensure all team members are on the same page. Use video conferencing tools to bridge geographical gaps.

Pressure to meet deadlines

If a team lacks resources, it might be difficult to meet the outlined deadlines. What’s more, a rush in reaching the targeted deadline date can often lead to oversight and errors in the processes.

How to solve it?

  • Allocate adequate resources

Thoroughly review all the processes where the M&A team needs to be involved, and based on that, ensure each process has enough specialists to perform. While small deals might need a dozen specialists to handle all M&A stages, megadeals might require a large department of professionals to be effective.

  • Initiate stress management programs

Implement stress management programs and provide support for team members to prevent burnout.

  • Be realistic with deadlines

And be ready to adjust them. Set realistic timelines that consider potential delays and ensure sufficient time for due diligence.

Key takeaways

  • The M&A deal team refers to a group of specialists responsible for the transaction’s execution, coordination, and closure.
  • Typically, all the professionals involved in the deal planning, execution, and integration can be divided into 6 main stakeholder groups: executive team, business unit leadership, corporate development, transaction lead, integration management office, and external advisors.
  • When assembling an effective M&A deal team, it’s recommended to look for people with diverse skill sets, provide strong leadership, clearly define roles and responsibilities, establish transparent communication, and ensure ongoing training and development.
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