One of the expansion strategies for a company can be in acquiring others or in merging. A move that involves two sides – those organizations willing to buy (buy-side) and those presenting themselves in the market to be sold (sell-side). For both parties, planning and methodology are necessary.
Especially for the buy-side, after all, it is the side that is 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) business specialized in offering customized advice to both sides of the process, the decision to go to the market and buy demands rigor in certain procedures.
The specialist summarizes these provisions in a checklist. “These are steps that, if well observed and fulfilled, enhance the buy-side for a successful negotiation,” he says. Check out the points highlighted by the consultant:
1 – Market research, to evaluate the conjunctural conditions, projections, and perspectives;
2 – Mapping opportunities, so that the one that best meets the purposes and specificities of the buy-side is identified;
3 – Strategic analysis: it is not enough to just map and identify. A strategic analysis is needed, internal and external (conjuncture, market, and the other side, that is, the sell-side, the businesses willing to sell);
3 – Framework, an important element of the strategic analysis, but with a more specific focus on a certain aspect of the process;
4 – Execution of the negotiation, so it is a win-win M&A process, that is, advantageous for both parties, healthy for the market;
5 – A post-buy integration plan (post-merger or acquisition). This includes integrating teams and employees of the organizations involved, as well as systems and procedures.
According to Grisotto, each of these stages is of decisive importance. But he draws special attention to PMI (Post Merger Integration), that is, integration after the acquisition. ‘The integration between the buying organization and the one that was sold is often the most delicate, the most critical point. Not always corporations and people are prepared to do this integration,’ he notes.
The Zaxo specialist explains that the term buy-side is used in the financial market, referring to the buyer/investor side, such as investment funds, insurance companies, pension funds, asset managers, and of course, medium and large companies. However, he points out that it also applies to medium and large companies interested in mergers and acquisitions. ‘The M&A process requires methodology for both sides, the buy and the sell side,’ he emphasizes.
In Grisotto’s assessment, although the global scenario is impacted by ongoing conflicts (in the Middle East and the Russia versus Ukraine war), the mergers and acquisitions market remains active. Corporations mainly from the United States and China are making acquisition moves in various countries, acquiring local companies in a wide range of economic activities.
In Brazil, internally, analyses also point to a movement of mergers and acquisitions. In just the first month of the year, at least 85 of them were mapped by PwC Brazil. In a report released in March, the consultancy announced that, by 2024, mergers and acquisitions in the country are expected to grow compared to 2023.
