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Mergers and Acquisitions (M&A): How to Prepare for Predicted Growth

Aug 20, 2020 by Chris Cahill

IT pro considering M&A growth and what it means for an O365 tenant migration

Before COVID-19, mergers and acquisitions (M&A) were already declining slightly worldwide, but a weaker global economy has significantly slowed activity down. 

Q2 deals in the U.S. alone were 83% down year-on-year. $77 billion worth of pending deals have been withdrawn or terminated.

As a company driven by mergers and acquisitions, what can your business do to align itself to be in the strongest position and move quickly when markets settle down?

This is a crucial time to plan. Q4 2020 and Q1 2021 are predicted to see robust mergers, acquisitions, and disposals (MAD) activity, so your company needs to be ready to strike rapidly and take advantage of changing business conditions.

4 Steps to a Successful M&A Recovery Plan

1. Evaluate Business Goals

Use this downtime to clearly define and evaluate goals from your anticipated mergers and acquisitions with company executives. As the world has shifted, the goals you set out for 2020 aren’t applicable anymore. This is a time to analyze what’s happened, look ahead to where you think things will be, and chart the new course for the new future.

Risk assessment teams should identify potential hazards to determine if additional losses will impact your ability to operate or raise financing for future deals.

This evaluation should include a gap analysis to determine the potential gap between your current capabilities and recovery requirements. If you don’t have the resources you need, including human capital, it’s time to act. This should be applied to your business plan in general and to your infrastructure and information systems by framing it against your current financial situation and goals.

2. Analyze Halted Mergers, Acquisitions, and Disposals

If you had to bring activity to a halt in the first half of 2020, determine the expected losses from any MADs that fell by the wayside. This should include termination fees, such as breakup penalties, lost goodwill, accounting, and legal fees. The impact of these losses should be quantified in terms of both hard dollars and lost opportunity costs.

This is not the time to sit around and hope things get better. There’s still time to identify ways to make up revenue in Q4 2020 and Q1 2021 to bring growth projections back in line. Planning should include discussions about current operations, planning for the rest of 2020, and strategic goals for 2021 based on the reality of an uncertain business environment.

3. Communicate the New Plan

In this time, companies need leadership the most. Your team is looking to you and your management team to chart the course for success and keep business moving forward. They need to know you’re in charge, and there’s a plan.

You need to project calm and confidence, even amidst turbulent times. Leaders need to be realistic – and honest about what’s ahead, but should also project optimism about future opportunities

Communicate the new plan with employees so that everyone is ready to move rapidly when M&A activity picks back up.

4. Develop your Migration Plan for Future MAD Activity

In MAD deals, the quicker you complete the transition, the more successful it will be. If both organizations are on Office 365, you’ll need to develop a solid Office 365 tenant to tenant migration plan. That way, when it’s time to merge or dispose of assets, the pre-planning involved in deciding the best migration strategy will already be in place.

Migrating data when mergers and acquisitions take place can be a major challenge if you’re not prepared. It can bring business to a screeching halt and may take months to recover. In most deals, the value is greatly increased by the companies’ synergies and eliminating duplication of work and assets. IT environments must be brought into alignment quickly with an effective Office 365 tenant migration strategy

Unfortunately, some members of the C-suite are more focused on the financial aspect than the operational side. Yet CIOs, Security Managers, System Admins, and M&A Technical Leads may be responsible for more than a quarter of all integration efforts across organizations.

Having a plan in place and ready to go when the timing is right can shorten M&A cycles and allow your company to move faster and more efficiently than your competitors. As we know, the planning and discovery phase of M&A often takes longer than any transition. Whether you’re looking at migrating data, merging data, or managing through a breakup, the planning process will determine your success.

Robust Mergers and Acquisitions Activity Ahead

The M&A marketplace is poised for pent-up demand and robust activity in the months ahead. There will be bargains out there and economies of scale that can be achieved. The market is ripe for roll-ups and consolidation. In turmoil, there is almost always an opportunity.

For your company, the smartest thing you can do right now is to assess your situation and business goals, communicate your new plan and get ready for the technical demands that future M&A activity will create. 

When preparing for an upcoming merger or acquisition, don’t forget that downtime due to a poorly-executed O365 tenant migration can be costly.

A More Efficient Office 365 Tenant Migration

When you’re planning your next Office 365 tenant migration, use Quadrotech’s Cloud Commander to migrate core workloads between tenants. The advanced solution can hit 1 TB / hour speeds for Exchange Online data, meaning entire tenants can be consolidated in a single weekend. 

Intelligent planning minimizes disruption for end-users, and the tool is highly customizable for seamless transitions, even in complex enterprise-scale environments.

To learn more, please contact our specialist team and tell us all about your upcoming project. We’re always ready to help.