MERGERS & AQUISITIONS: SUCCESS AND FAILURE.
Whether you’re on the buy or sell-side… what happens when in MSP partner or strategic vendor is engaged in an M&A?
M&A is either a success or failure filled with a spectrum of emotions. Contemplate success from a position of right and wrong, not financial gain or power. What is the truth? Financial gain (a.k.a. “everybody benefits”) is the output of a successful
M&A. M&A failure is often the result when only a select few benefits.
M&A success has proven to be very difficult with many executives admitting >50% of acquisitions were unsuccessful.
Why? An ill-advised consideration of their clients, ironically, who is their primary revenue source. When the M&A project team excludes operations, the risk of failure is high… moreover, although the financials are advantageous, the project sometimes lacks moral ethics for the greater good including longevity of the client relationship.
There are Operational Risks:
▪ ‘You don’t know what you don’t know’
▪ Communication vacuum
▪ Competitors (sharks) begin calling (circling)
▪ Conflicting priorities between parties
▪ Disruption - client, vendor, and MSP services
▪ Lack of leadership direction and strategy
▪ Lack of project planning methodology
▪ Lack of resource capacity planning
▪ Merge of corporate cultures
However Proactive Risk Mitigation can work:
▪ Confirm Service Level Agreement commitments
▪ Require a performance guarantee with
penalties to minimize client disruption
▪ Client/MSP team skip-level meetings
▪ HR: Identify TUPE or similar options
▪ Client/vendor forums
▪ Confirm contract termination obligations
▪ Confirm contract assignment options
▪ Confirm exit strategy
▪ Require a detailed project plan
▪ Require a communication cadence