Is M&A Only For The Enterprise? Short Answer - No

While large M&A deals dominate the headlines, M&A sounds as if it’s a battle where Goliaths drive all the chips. We hear about the large enterprise buyer acquiring a smaller one - Microsoft acquiring LinkedIn or Elon Musk buying out Twitter. M&A is understood to be a domain of elite Bankers cutting deals of millions and billions of dollars - an activity that may seem out of reach for smaller companies. Is it really so?

Challenges and Considerations for M&A

Industry research suggests the costs of M&A activities from the buyer's viewpoint work out to a hefty sum; making it the turf to large enterprises with investment banking support. We can break down the costs into five categories:  as mentioned in Fig.1.

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Putting aside the question of resource allocation, the cost drivers tend to be a large number - making the whole activity of M&A search and execution in the realm of enterprises. Unless the ticket size is substantial, this structure and cost become infeasible to justify.

Mid-Sized M&A: A Strategic Growth Channel

Does it mean that smaller companies should not look at M&A as a growth channel?

Medium token-sized ($5-25m transactions for strategic investments) M&A deals can be the best path for mid-sized corporations to gather a unique set of market-tested [people + clients + intellectual property] - which is difficult or time-consuming to develop organically. Such deals can very quickly enable midsize companies to look for revenue growth in new markets (geographies) or expand product offerings and talent acquisition through team integration. The only caveat - the cost drivers need to be pared down and made on-demand.

GrowthPal: Your Outsourced M&A Team

GrowthPal has been able to do just that - leveraging global data and the latest technology for senior investment analysts. They provide an outsourced corporate development team, capable of defining exact mandates, shortlisting ready-to-transact acquisition targets, and help in deal execution through the right structuring and analysis. Mitigates risks with detailed off-the-market data and post-merger programs are supported by rich information of teams.

Conclusion

This technology-driven approach transforms the traditional cost structure into a subscription and success-based model - a significant advancement in making M&A affordable for all midsize corporations.

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