In the transaction phase, we provide: cultural due diligence support, valuation, synergy and acquisition modeling support, general due diligence support, negotiations support, deal design services, financing services, risk management strategies, and integration planning.
While the choice of outstanding investment bankers, attorneys and accountants ready to help you navigate through these issues is almost unlimited, many of them overlook cultural due diligence, which is one of the most underestimated areas of focus in the transaction phase. Edgar Schein, former MIT professor at Sloan School of Management stated, “Culture may be loosely thought about, but it is only after the merger that it is taken seriously, suggesting that most leaders make the assumption that they can fix cultural problems after the fact. I would argue that leaders must make cultural analysis as central to the initial merger/acquisition decision as is the financial, product or market analysis” (Applied Mergers and Acquisitions by Robert F. Bruner). At Watermark Advisors, we place a healthy emphasis on cultural due diligence to make sure that the issues are resolvable between the acquirer and target’s respective cultures.
Another mistake made by many investment bankers, attorneys, and accountants is that integration planning is not initiated early enough in the transaction phase and therefore the acquirer is not adequately prepared to enter the integration phase as the transaction phase reaches conclusion. Watermark helps clients initiate and plan for the right approaches to integration at a time early enough such that Day 1 post close, the experiences by the target’s employees, clients, vendors, and overall marketplace unfold in ways that increase buy-in for the acquisition.
How can cultural due diligence and integration planning be overlooked by so many investment bankers and others in so many deals? Cultural due diligence falls under the field of organizational development, while integration is a change management process. Most investment bankers, corporate M&A attorneys, and accountants do not bring these skills to the table for an acquisition transaction. And yet, they are critical to put on the deal table and resolve. Watermark does put these at the forefront of the transaction phase. We know what it will mean for a company’s ROI goals.