If you’re a CEO or deal lead pursuing inorganic growth, learn more about “programmatic M&A”
What is programmatic M&A?
It’s doing a series of deals related to a specific business use case or theme, rather than ‘big bang’ transformational transactions.Here is a well-written McKinsey article that describes the concept.
What are the benefits of programmatic M&A?
Least risky approach to M&A. 65% of companies that practice programmatic M&A outperformed their peers
Effective across nearly all sectors
Even acquirers pursuing large deals benefit from a programmatic approach
How do you approach programmatic M&A the right way?
Programmatic acquirers share the following characteristics
Competitive advantage:
They understand clearly why they win today, and what they need to win in the future.
They understand what market trends they need to pursue and the assets they need to pursue their trends
Conviction:
They assess their M&A themes regularly and build executive-level consensus around certain areas
When a deal comes to the table, they are not scrambling to understand the industry
Instead, they know what to look for and can focus on assessing the specific opportunity
Therefore they are better prepared to ask the right questions and mitigate deal risks because they are already educated on the use case
Capacity:
They are prepared with the tools and talent frameworks to react quickly
Tools – e.g. due diligence checklists, integration checklists
Talent – clear process for the integrated organizational structure