mergers-and-acquisitions

Mergers and acquisitions

> Deal execution requires qualified legal, tax, and accounting advisers. This structures the

> commercial thinking and identifies what needs specialist work; it does not substitute for it.

The thesis comes first, and in writing

Before looking at any target: what would an acquisition get us that we cannot build or partner our

way to, and why is buying better?

Legitimate theses are specific — a capability that would take three years to build, access to a

customer base we cannot reach, consolidation economics in a fragmenting market, a team with scarce

expertise.

Illegitimate theses, all common: growth for its own sake, defensive panic, the target became

available, and the belief that two struggling businesses combine into a healthy one.

Write the thesis before the target. A thesis reverse-engineered to fit an available company will

justify anything.

Screening

Score candidates against the thesis, not against how impressive they are. The best target is

frequently the boring one that fits precisely.

Assess cultural and operating-model fit early rather than as a soft afterthought. Integration failure

is the most common way deals destroy value, and its causes are visible before signing — incompatible

decision-making, different customer commitments, a founder who will not stay.

Valuation framing

Two numbers matter and they are different: what it is worth to you given the synergies you can

actually realize, and what you would pay, which must be lower.

Be brutal about synergies. Cost synergies are real and estimable; revenue synergies are usually

optimistic and rarely arrive on schedule. Model the deal without revenue synergies and see whether it

still works — if it only works with them, it probably does not work.

Name your walk-away price before negotiating, and treat it as binding. Deal momentum is a powerful

force and it is not evidence.

Diligence

Commercial diligence answers whether the thesis is true: are the customers real, is the retention as

claimed, does the growth come from where they say. Financial, legal, and technical diligence run

alongside with specialists.

The questions most often skipped and most often fatal: what is the customer concentration, what

happens to the key people at close, what liabilities transfer, and what is running on infrastructure

or contracts nobody has documented.

Diligence exists to falsify the thesis. Diligence run to confirm it will confirm it.

Integration

Plan it before signing, not after. Decide in advance: what integrates, what stays separate, who

runs it, and what the first hundred days look like.

The predictable value destroyers are attrition of the people you bought, customer churn during

transition, and a stalled integration that leaves two of everything indefinitely. Each is

foreseeable and each is planned around, or it is not.

Sources

references/sources.md in this skill lists the outside authorities that settle the questions

here — what each one is authoritative for, and what you may do with it. Check them before

answering on anything they cover, and cite what you used. Most are free to read and not free

to reproduce; the use note on each is binding.

Never

• Proceed with a thesis that changed to fit the target.
• Treat the signed deal as the finish line. It is the start of the part that determines whether it

worked.