One of a company's expansion strategies can be through acquisition or merger. A movement involving two sides – the buy-side, consisting of organizations willing to purchase, and the sell-side, consisting of those offering themselves for sale in the market. For both parties, planning and methodology are necessary.
In particular for the buy-side, after all, it is the side seeking this growth in its activity. According to business consultant Leonardo Grisotto, co-founder and managing partner of Zaxo, a boutique M&A (Mergers and Acquisitions) firm specialized in providing customized advisory to both sides of the process, the decision to go to the market to buy demand requires strict rigor in some procedures.
The specialist summarizes these measures in a checklist. "These are steps that, if well observed and followed, enhance the buy-side for a successful negotiation," he states. Check the points highlighted by the consultant
1 – Market research, to assess current conditions, projections and perspectives;
2 – Mapping of opportunities, so that the one that best meets the purposes and specificities of the buy-side can be identified;
3 – Strategic analysis: it is not enough to just map and identify. A strategic analysis is needed, both internal and external (economic situation, market, and on the other side, that is, the sell-side, the businesses willing to sell);
3 – Framework, an important element of strategic analysis, but with a more specific focus on a certain aspect of the process;
4 – Execution of the negotiation, so that it is a win-win M&A process, that is, advantageous for both parties and healthy for the market;
5 – An integration plan for post-buy (post-merger or acquisition). This includes everything from the integration of the teams and collaborators of the involved organizations to systems and procedures.
According to Grisotto, each of these stages is of decisive importance. But he draws special attention to the PMIPost Merger Integration, that is, the integration after the acquisition). "The integration between the organization that bought and the one that was sold is often the most delicate, most critical point. Companies and people are not always prepared to carry out this integration," he notes.
The Zaxo specialist explains that the term buy-side is used in the financial market, referring to the buying/investor side, such as investment funds themselves, insurance companies, pension funds, asset managers, and of course, medium and large companies. However, it also applies to medium and large companies interested in mergers and acquisitions. "The M&A process requires a methodology for both sides, the buy and the sell-side," he reiterates.
In Grisotto's assessment, although the global scenario is affected by ongoing armed conflicts (in the Middle East and the Russia-Ukraine war), the mergers and acquisitions market remains active. Corporations mainly from the United States and China are making purchasing moves in various countries, acquiring local companies across a wide range of economic activities.
In Brazil, internally, analyses also indicate a trend of mergers and acquisitions. In the first month of the year alone, at least 85 of them were mapped by PwC Brazil. In a report released in March, the consultancy announced that in 2024, mergers and acquisitions in the country are expected to increase compared to 2023.
