Herding Cats or Streamlined Decisions? Aligning Stakeholders in M&A

Effectively aligning multiple decision-makers with the right data to inform critical M&A choices remains a challenge for private equity (PE) teams. As one PE partner aptly described it, "it can sometimes feel like trying to herd cats."

The Data Sharing Dilemma:

A key aspect of this challenge involves managing risks identified by advisors during due diligence (DD). These risks,along with the associated data, need to be communicated to a wider audience beyond the core deal team. This includes the Investment Committee (IC) and various functional heads (legal, risk, tax, ESG, etc.).

The Current Landscape:

• Information Overload: Deal teams and advisors grapple with vast amounts of data during DD.
• Communication Bottlenecks: Summarizing and disseminating this information efficiently and accurately to multiple stakeholders proves difficult.
• Pre-IC Approval Hurdles: For teams requiring internal expert sign-off before IC meetings, the challenge intensifies.

The Peril of Unstructured Communication:

Relying on ad-hoc emails, interim reports, and update calls to share critical risk data creates a high risk of:

• Inefficiency: Time-consuming processes hinder timely decision-making.
• Information Silos: Crucial data may be overlooked or misinterpreted.
• Missed Risks: Unstructured communication can lead to critical risks slipping through the cracks.

Beyond the Analogue Approach:

Many PE teams acknowledge the limitations of their current "cat-herding" communication methods. Common practices include:

• Forwarding advisor emails to broader teams.
• Creating condensed presentations or Excel spreadsheets based on advisor reports.
• Summarizing internal expert insights from IC memos.
• Scheduling meetings to discuss and manage key risks.

The Need for Streamlined Communication:

A clear consensus exists among PE teams regarding the need for a more streamlined approach to communication during M&A transactions.

Share Your Insights:

Does your organization have efficient communication channels for sharing critical M&A data with decision-makers? How can we improve the flow of information between deal teams and key stakeholders? Let's discuss strategies for fostering informed decision-making throughout the M&A process.