The Hidden Risks of M&A: What to Watch Out for in Your Deal

As a business owner, there are many reasons why you might be looking to sell your business. One reason may be that you’ve reached the end of your career and are searching to secure your company’s legacy and set your employees up for future success. Another could be that you’ve grown the business as far as you can and need a partnership to scale. Whatever the case may be, M&A can offer appealing and lucrative opportunities for business owners.

But like any large change in life, it’s important to think carefully about M&A and remember that the process is not without risk. Whether it’s a culture clash or regulatory limbo, there are plenty of factors that can turn a seemingly great idea into a headache. The team at Symmetrical guides sellers through every step of the M&A process, helping them avoid common pitfalls that can derail a deal. Here’s what to watch for — and how to navigate potential challenges in advance.

Cultural misalignment

Ensuring a cultural fit between the buyer and seller is one of the most important predictors of an M&A deal’s success. This isn’t just an abstract question of “fit”; it can have a tangible impact on your bottom line. According to McKinsey research, companies that effectively manage culture are much more likely to reach their target revenue synergies than those that don’t. (The study found that 74 percent of businesses with effective culture management met their post-deal revenue targets, compared to just 48 percent of those with ineffective culture management.)

How can a business owner proactively avoid cultural misalignment during a deal?

Analyze work habits: Acquisitions tend to work better when both sides of the transaction have similar work habits. If one company has a top-down leadership approach and another has a more deliberative approach, this could be a sign of cultural challenges after a deal. During the due diligence process, be sure to make sure your work habits and structures are actually compatible, which will minimize employee disruption and ease the post-deal transition.

Have honest discussions about culture: No two firms are going to have identical work processes or corporate culture. That’s why it’s important to have honest discussions between buyers and sellers about the culture you’re trying to build after the deal. By having frank discussions during the negotiations, corporate leaders can help shape the new business culture after the acquisition — and prepare for these changes ahead of time, which helps increase employee buy-in.

Operational disruptions

Ensuring a cultural fit between organizations will help lay an important foundation for minimizing operational disruptions. But it takes more than just a cultural match to ensure a smooth post-deal transition. Corporate leadership on both sides of the transaction should work together during the due diligence process to understand the other side’s business operations and build a detailed integration plan. Workflow patterns, IT systems, and corporate structure are all key elements to consider for this plan.

Ultimately, by being honest about your business’ strengths and weaknesses, you can use the acquisition to achieve new synergies. When done correctly, an acquisition can not only avoid operational disruptions but also strengthen business operations.

Legal Complications and Delays

Delays are often a fact of life in M&A deals. McKinsey reports that 30 percent of the 50 largest global acquisitions over the past two years experienced some kind of delay. For a smaller transaction, a delay is arguably even more disruptive. Not only could it jeopardize the transaction, but it allows competitors to take advantage in the marketplace.

Many different types of legal complications can arise over the course of a deal, including antitrust regulation, contractual (dis)agreements, and deal structure. Once again, the key to avoiding falling into a trap starts during the due diligence process. Try to envision specific complications and delays ahead of time and develop contingency plans. It may be impossible to avoid all delays, but with a little foresight, they can go from being a deal’s fatal blow to merely a short-term nuisance.

We have years of experience helping business owners navigate successful acquisitions and understand the risks involved at every stage. Our team can serve as a valued, experienced counselor as you navigate the specifics of your transaction. Connect with us today to learn more about how we can help make your M&A deal smooth sailing.

Selling your business is no simple matter. One of the key elements of any deal is the due diligence process, which requires large amounts of paperwork as the buyer and seller seek to understand the ins and outs of their respective businesses. Years ago, due diligence used to take place in a secure physical room full of sensitive company documents.

Fortunately, online data rooms now offer a far more efficient, secure, and time-saving approach to due diligence. Our team has helped numerous businesses and knows how to use the latest technology, for example, online data rooms, to keep your company data secure while also making sure the deal continues to proceed efficiently. Here are some of the best practices for using online data rooms.

Why Online Data Rooms Are Essential

An online data room allows the buyer and seller to upload all of their documents virtually. These documents will often contain sensitive corporate information, and it’s essential that they be kept safe so that there are no leaks that could jeopardize a deal. In the past, these kinds of documents would simply be kept under lock and key. A virtual data room adds layers of additional security, including password protection, data encryption, and user permissions, allowing business owners to decide who has permission to view, edit, or print documents.

Best Practices for Online Data Rooms

While an online data room is much more secure than a physical room, it is important to continually monitor it over the course of the due diligence process to make sure everything is operating smoothly. Here are a number of best practices that can enhance the effectiveness of online data rooms:

Establish the proper permissions: Many documents in the online data room may be sensitive, and not everyone involved in the transaction process may need access to every single document. One of the key advantages of the online data room is that you can set different permissions for different documents. Some users may only be able to view a subset of documents, while others may have access to all of them. This can enhance efficiency and overall security by allowing you to directly control the flow of information to the appropriate parties in the online data room.

Stay organized: Organization is just as important in an online data room as it is in a physical one. As documents are uploaded to the online room over the course of the due diligence process, it’s important to make sure that your files are clearly labeled and easily findable.

Perform regular audits: While online data rooms have many advantages over physical rooms, one drawback is that it can be more difficult to trace access to a virtual room. That’s why it’s important to perform periodic audits to ensure that the right employees have permission to enter the virtual data room and there are no vulnerabilities.

Don’t forget about archiving: After the due diligence process is complete, some of the documents in the online data room may still be required for regulatory purposes. It’s important to ensure your data room archives these essential documents so that you still have access to them. Failing to take this step risks having the documents disappear once the online data room is no longer in use.

Online Data Rooms: An Efficiency Tool

Online data rooms can help streamline and simplify due diligence, which is often the most convoluted process of a deal. These rooms can be powerful tools that ultimately keep your business documents more secure and better organized, which will help you during the due diligence process and through the final stages of a deal.

No system is completely perfect, which is why it’s critical to work with someone who has experience navigating online data rooms and is familiar with the best practices that will keep your sensitive corporate information safe. Our team can work with you to establish the right kind of online data room and help you monitor the system to make sure it is working properly and efficiently. Connect with us to learn more about how we can make the sale of your business as efficient and effective as possible.

The M&A deal market is shaping up to be strong in 2025. We are past the election-year uncertainty of 2024, the Federal Reserve is poised to continue its rate-cutting cycle, and deregulatory policy looks like it could be on the horizon. What does that mean for a business owner looking to sell? The M&A market is about to get more competitive.

Competition should not be a scary word. In fact, it represents a real opportunity. Sellers who are better organized and well prepared for a merger process are the ones who will come out on top — often  at a higher valuation, thanks to the competitive landscape. Our hands-on approach spans every stage of the deal process, beginning with sale preparation, followed by reaching out to potential buyers and supporting negotiations every step of the way. Here’s how to navigate the competitive M&A market successfully.

Analyzing the Deal Landscape

The first step in being prepared for a deal is understanding the state of the market. 2024 saw an increase in deal volume compared to 2023, with $3.5 trillion worth of deals overall, according to Bain & Company. Middle-market deals of $50 million less make up a considerable chunk of this landscape, accounting for more than 40 percent of all M&A transactions between 2022 and 2024. That means there are lots of prospective buyers out there.

Any successful deal should start with a detailed analysis of recent sales in your sector. Not only will this help you find potential buyers, but it will give you a sense of market valuation. Sellers should also begin to develop their pitch toward prospective buyers — which requires a deep understanding of your business, its fundamentals, and growth opportunities.

Finding the Right Buyer

Your initial preparation in the early stages of the M&A process will ultimately guide you through the remaining steps. By thinking about your business’s strengths, you will begin to develop an idea of the different types of buyers that may be interested in your business.

It’s important to remember that in a competitive environment, buyers may be weighing multiple opportunities for a deal. This is a time when an M&A consultant can be particularly advantageous. Our team has been involved in over 150 transactions worth a total exceeding $1.5 billion. We work with sellers to find a pool of interested buyers who share a complementary corporate culture, and our experience negotiating numerous deals can help get a deal over the finish line.

The First Impression

Buyers these days have no shortage of potential targets. As a seller, your job is to prove that you’re the best option on the table.

One way to do this is with a strong first impression. This is where all of the preparation you’ve done ahead of time begins to pay off. Be sure to research the details about each prospective buyer so that you’re able to talk concretely and intelligently about their business. Then, you can shift into describing why your business is the right fit for them, displaying the market research you’ve performed.

Ultimately, your goal is to prove to a buyer from the first impression that you are a strong analyst, you are working with a strong team, and you’re committed to a deal. A buyer who feels confident in the seller’s competence and value is one who is going to be more enthusiastic about a deal.

Turning Competition into Value

We work closely with sellers to help them through the M&A process and offer a leg up on the competition. While a competitive M&A landscape might seem daunting, it represents a great opportunity. A seller who works with a great team and has the proper preparation can set themselves apart during the M&A process, earning a better deal in the process. Get in touch with us today to learn more.  

Building a successful business requires a team approach. Navigating a sale is no different. While the process of a sale can seem daunting — possibly even more challenging than running the business itself — a strong team can make your M&A transaction feel easier and ultimately more effective.

At Symmetrical, we’ve acted as trusted consultants to business owners during sales and know how to work as key members of a team to achieve the best possible deal. As members of sales teams ourselves, here’s what we’ve learned about why leveraging a team can help make for a successful deal.

The Many Moving Pieces of M&A

There’s a lot that goes into the sale of a business behind the scenes: tax expertise, financial analysis, strategic planning, legal reviews, and more. That’s a lot for any one person to handle. In fact, by assembling a team with diverse skill sets, you can put yourself at an advantage by matching your team’s skills with the task at hand.

In our experience, there are a few key team members involved in any deal:

The Benefits of a Team Approach

Selling your business is a major decision, and it’s important to be prepared. By assembling a team with financial, legal, tax, and strategic expertise, you’ll be able to run your negotiations more quickly and efficiently, producing a better deal overall.

You may also consider tapping existing employees to become part of your M&A advisory team. This can help generate employee buy-in to the deal, which is extremely helpful for company morale. Not only that, but your existing employees have greater familiarity with your business than outside advisors and can offer a key source of inside knowledge into the workings of the business and its strengths.

Finally, the team you assemble ultimately reflects on you as the seller. When the seller crafts a strong team, the buyer receives a kind of positive reinforcement that the transaction they’re pursuing is a smart and strategic choice . The best acquisitions are the ones with a seamless corporate fit — and your M&A team offers the first indication of your two sides working together.

We’re a Part of Your Team

We take a team approach to M&A. We don’t arrive on day one and start issuing orders about your business; we seek to integrate into your existing team, offering our insight along the way as we guide you through the sale process. Contact us today to learn more about how we can help your business through a sale.

A business acquisition might not seem like much more than a mathematical equation. Perform a cash flow analysis, review comparable businesses, project future earnings — eventually, you wind up with the magical number that is a business’ value.

While these numbers are certainly important, they don’t tell the full story. Whether it’s brand recognition, employee treatment, or company legacy, there is a whole range of elements that not only contribute to a business’s success but add additional value. At Symmetrical, we help business owners understand their true business value beyond the dollars and cents, helping them get the best deal possible. Here are a few key factors that contribute to a business’s true value.

Employee Treatment

How employees respond to a merger or sale is one of the most important indicators of a deal’s long-term success. That’s part of the reason why a strong cultural fit between a buyer and seller is so important: If employees can tell that a buyer shares their culture, their transition will be easier, and they’ll be more likely to start contributing right away.

The upshot is that positive employee treatment can be a major asset in a deal. Employees who feel like their company invests in them, listens to them, and keeps them informed about corporate developments will be much more likely to buy into a potential sale and will trust that the company is keeping their best interest in mind. Buyers know that this kind of corporate culture is not easy to build — and it can add considerable value to a deal.

Legacy

Legacy can be a tough thing to quantify. Like brand recognition, it can only be built slowly over time. The reason a company’s corporate legacy can add value to a transaction goes beyond mere reputation. Why? All of the factors that contribute to legacy — client relationships, customer satisfaction, and employee dedication — directly impact the business in a positive way. Emphasizing your business’ reputation and legacy of great service is another way to add value to a deal beyond the raw figures.

Exit Terms

The terms of the deal itself can also affect its final value. This is where understanding the buyer’s needs along with your own in the course of negotiation becomes critical. The ideal exit terms might be completely different from one buyer to the next: One buyer might be eager to keep the seller involved during the transition period to help achieve better continuity, while another buyer might want a clean state once the deal is closed. If you can align your own goals with those of the buyer, this represents an opportunity to add value to a deal.

Exit terms can add value to a deal through a mechanism like an earnout. In this case, a buyer and seller negotiate additional cash payments in the event that certain performance metrics are met. This could be beneficial to a seller confident in the future path of the business and willing to bet on its long-term success. 

Whatever shape a final deal takes, it’s essential to remember all of the elements beyond the numbers that contribute to a business’s valuation. By emphasizing durable characteristics like legacy and employee satisfaction, sellers can help achieve for themselves the best possible deal. Our team has a deep understanding of what really defines business value, and we can help your business reach its true worth in a deal. Get in touch with us today to learn more about exploring the sale process.

Selling your business is a major decision, and once you’re ready to take the plunge, it can be tempting to dive into a deal as fast as possible. But timing is everything in M&A. Maximizing your business’ value has as much to do with when you sell as it does your corporate fundamentals. The Symmetrical team works with business owners to strike when the timing is right — and to achieve the best deal for our clients. Here are a few things we look for when considering the best timing for a transaction.

Understanding Economic Cycles

Markets are frequently fluctuating, and as you would expect, better deals come in times of economic growth. In growth cycles, companies are buoyed by rising valuations and often compete to expand and shore up market share. Their access to capital improves, enabling them to explore deals. These are great times to be a seller.

The challenge is that it’s difficult to know how long these times will last — and they also vary by sector. One sector of the economy might be poised for growth while another is preparing for turbulent times and cutting costs. As a seller, it’s important to keep an eye on micro and macroeconomic trends simultaneously. The sellers that have success in M&A are the ones that are predictive rather than reactive — so that when companies are able to expand, you’re ready to seize the opportunity.

Choosing a Moment of Peak Value

Just as it’s important to think about when a buyer’s economic fortunes are at their best, it’s also critical to begin a sale of your business only when your own business is at peak value. But how can you identify peak value?

It starts with economic performance. A time of declining revenue typically isn’t the moment to explore a sale. However, while your business’ past performance and present fundamentals will help attract suitors, what will ultimately close a deal is convincing a buyer that your firm’s future performance holds even more promise. In other words, achieving your business’ peak value is largely about framing how your business will enable a buyer to thrive in new ways. Not only will this separate your firm from other potential targets, but it will also help you achieve the best deal.

Weighing the Regulatory Environment

As a seller, it’s important to understand the buyer’s regulatory environment. Regulation and government legislation can have a major impact on economic performance, and as a seller, you should be aware of these factors when exploring a sale. Just like with economic cycles, think about the future here more than the present. Under the incoming Republican administration, for example, we would expect a favorable M&A regulatory environment over the next few years.

Achieving the Right Timing for Both Sides

Ultimately, an M&A deal can only reach peak value when the timing is right for both sides: the buyer and the seller. By thinking proactively and analyzing market and regulatory trends, it’s possible to have a better sense of when buyers will be looking to make a deal.

Our team can help you analyze the market so that when the moment is right for you and a buyer, you’re prepared to make a deal and maximize the value you’ve worked so hard to build. Get in touch with us today to learn more about how we can help set the stage for success.

A brave new world is upon us in the M&A field. Artificial intelligence is already starting to change the way firms conduct transactions. While AI can be a boost to companies looking to sell, it also requires knowledge to harness the power of this technology. The Symmetrical team is constantly evaluating changes to the M&A field. Here’s how we anticipate AI will transform the M&A landscape.

Identifying Targets

Finding the right target for an acquisition — or from the seller’s side, the right buyer — is ultimately the most important part of an M&A deal. No amount of good work on a deal can overcome a bad match between two companies.

One of AI’s great strengths is its ability to churn through large amounts of data. Previously, the work of finding potential targets for a deal required tracking down piles of data on companies — and then sifting through them. Artificial intelligence makes this work considerably easier. Not only can AI analyze data rapidly, but it may be able to propose targets that wouldn’t have otherwise been on a company’s radar. For a business looking to sell, AI can also provide insight into what types of buyers are likely to be the best fit and most interested in a deal.

Changing Due Diligence

Due diligence in M&A has already been disrupted once. The advent of virtual data rooms (VDRs) completely changed the way an M&A deal takes place, providing a secure, virtual place for representatives on both sides to review company fundamentals.

AI has the potential to add even more efficiency to this process. For instance, AI could be able to automatically organize documents that have been uploaded to the VDR, streamlining analysis by team members.

AI technology could also offer summaries of documents, providing high-level takeaways and acting as a first line of defense, suggesting key areas for team members to review themselves. (It’s important to remember, however, that AI can make mistakes, which is why a human review remains essential.)

Determining Company Valuations

When it comes time to determine company valuation, there’s a role for AI to play as well. Not only can artificial intelligence assist with the internal calculations that produce a company valuation, but it can also scan the reams of publicly available data on similar transactions to get a better sense of your company’s market value. This can ensure that if you decide to sell, you maximize your company’s value.

Where People Meet Technology

There’s a common misconception that AI will replace humans. At least when it comes to M&A, that’s not the case. Or at least it shouldn’t be the case. The power of AI isn’t that it does a deal for you — from finding the target to performing the due diligence to closing — but that it streamlines the process, and maybe even generates new ideas that you wouldn’t have otherwise considered.

The way we see it, AI becomes most impactful when it’s deployed strategically by professionals. Get in touch with us today to learn more about how we’re using new technology to help business owners get the best possible deal when it comes time to sell.

Now that we know the result of the 2024 election, we can start to look ahead to what the economy might look like next year and beyond. While a Kamala Harris presidency would have likely meant higher business taxes, most observers believe a Trump presidency will extend the provisions of the Tax Cuts and Jobs Act of 2017, which may jumpstart an M&A sector that has at times been somewhat stagnant. Here’s a brief look at what’s driving the current M&A environment.

Current Trends in M&A

The current M&A market is one of mixed signals. A recent report from Ernst & Young does a good job of capturing the state of affairs:

– Recent deal frequency is stagnant, while value is down. In October 2024, there were 108 deals, for a total value of $96 billion; by comparison, October 2023 saw 109 transactions for a total value of $260 billion.

– Overall year-to-date deal value has increased, reaching $1.32 trillion, a five percent increase from 2023.

While the October M&A market wasn’t necessarily booming, there have still been some pockets of M&A activity. Mergers of RIAs in the financial sector broke the record for monthly transactions in October, for instance, with 39 total deals, up from the prior record of 33 in January 2021

Lower Interest Rates May Help Middle-Market M&A

What to make of these trends? It’s important to recognize that we’re in a transitional phase, as one presidential administration ends and another begins. That may be one reason why recent overall deal volume hasn’t been on the rise; firms could be waiting to have a better sense of the economic outlook and direction of the country before completing a transaction. Every four years, it seems both buyers and sellers tend to pause and wait for the election outcome. This cycle has been no different, and we’re already seeing a rise in inquiries from both sides expressing interest in potential transactions.

When it comes to middle-market M&A, we expect a strong market going forward. One major source of that strength is an anticipated decline in interest rates.  Lower borrowing costs for buyers mean we may see more deals with a straightforward cash structure, lowering negotiation timelines.

Changes to Government Regulation

The incoming Trump administration will likely prompt a burst of M&A activity for a couple of reasons. If tax cuts are extended, businesses may feel the economic environment is advantageous and pursue transactions accordingly. Additionally, the Trump transition team has made it clear they intend to pare back anti-trust regulations. Concerns over anti-trust regulation can often have a major chilling effect on deals; a shift in government policy might make firms more bullish on M&A. 

One area that could constrainfuture M&A is tariff policy. Trump has spoken about imposing 60 percent tariffs on China and an across-the-board 20 percent tariff on all other goods imported to the United States. Some economists believe this could revive an inflationary spiral, which would likely put a damper on M&A activity.

Our View at Symmetrical

While the M&A market will always have its ebbs and flows, the combination of an incoming administration favoring lower business taxes and the decline in interest rates would suggest a favorable landscape for middle-market M&A. Our team at Symmetrical can help you consider the pros and cons of selling your business, and if you do decide to sell, we’ll be at your side through the entire process. Get in touch with us today to learn more about how we can help.

They say not to judge a book by its cover. Well, when it comes to M&A, the truth is that buyers often make snap judgments based on a business’ executive summary.

Why is an executive summary essential for finding the right buyer, and what goes into crafting an effective one? At Symmetrical, our team works with sellers to create strong executive summaries for businesses in a wide range of sectors. Read on to find out more about what goes into an executive summary and how this can lay the groundwork for the successful sale of your business.

Why an Executive Summary Matters

Think of an executive summary like a cover letter in a job application, or the pilot episode of a TV series: This represents your first impression, and the goal here is to grab a buyer’s attention and get them wanting more.

This is important for a number of reasons. First, buyers looking to make a strategic acquisition usually consider a number of different companies. A strong executive summary can help your business stand out among the fray.

Even more importantly, an executive summary is a way for a seller to capture the attention of buyers, which will most likely lead to a successful deal. One of the key elements of any good M&A transaction is the connection between the buyer and seller. The executive summary is the first test of this connection and can be designed to appeal to buyers that will fit well with your existing business.

Four Key Questions: Who, What, Why, and How?

Any good executive summary should answer four key questions: Who, What, Why, and How?

What is your business?’

Who are you as a business? (This can be both a philosophical question about your company values and a practical one about your employees and leadership)

Why are you going to market now?

How will you benefit the buyer?

Keep in mind it’s not enough to just answer these questions. It’s how you answer them. Attention spans are short, and you should strive to make your executive summary a compelling read. Brevity is your friend. This isn’t the place to dwell on the nuances of your corporate history. Those details can come later.

Think From the Buyer’s Perspective

What is a buyer trying to accomplish?

Most of all: adding value. This is why any executive statement should contain a value statement — a section that explains your company’s place in the market, its strategic importance, and what it can offer to a buyer. This value statement is arguably the most important component of the entire executive statement and typically appears at the top of the document.

Interested in Taking the Next Step?

At Symmetrical, we understand that the best deals are the ones with a seamless match between seller and buyer. And an executive summary represents the first step toward attracting the right buyer. Our team will work with you to learn your business, and then design an executive summary that achieves your goals. To learn more about how we can help kickstart the M&A process, get in touch with us today.

The decision to sell your business isn’t just a transaction; it’s also a complicated legal equation. From navigating NDAs to performing due diligence to determining the structure of a deal, a solid legal strategy is the foundation upon which a successful M&A transaction rests. At Symmetrical, we know how to help business owners navigate the legal terrain of M&A. Here are a few key legal considerations to consider when advancing toward a sale.

Non-Disclosure Agreements

Negotiating a sale with a buyer is always delicate. The risk of leaks can jeopardize the entire process, and sometimes a deal simply doesn’t make it over the finish line. An NDA can help provide peace of mind during a negotiation, ensuring that your business’ financials and intellectual property won’t spread beyond the confines of the deal room. This is an essential component of any merger and one we highly recommend.

Due Diligence

Due diligence might sound more like a financial consideration than a legal one. However, customer contracts, leases, employment agreements, and other agreements may contain provisions that are triggered by certain transactions, making a thorough legal analysis essential for many deals. In addition, depending on your type of business, it may be wise to look at your intellectual property and patents to determine how they fit into an M&A deal.

Deal Structure

The structure of a deal is one of the most important parts of any negotiation. As with due diligence, it’s also something of an underrated legal calculation. Many sales, for instance, will have complex tax implications and/or require shareholder approvals, both of which are legal questions that ought to be accounted for during the negotiation. Other legal frameworks that may be part of a transaction include representations and warranties (a way of ensuring that the information shared by both parties of the deal is accurate) and non-competes (a clause that’s frequently requested by buyers who are looking to ensure the seller doesn’t go and start a competitor).

The Importance of Early Legal Planning

At Symmetrical, we know how difficult it can be to find the right M&A transaction. That’s why it’s essential to think about the legal components of a sale early in the process — so that there are few surprises when it comes time to close the deal. To learn more about how Symmetrical can help you navigate these legal considerations, get in touch with us today. We’ll make sure you leave no stone unturned during your M&A journey.

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