The market for acquisitions in the A/E/C space is the most robust it has been in years.  The number of companies looking to acquire seems to grow every day.  And the number of A/E/C firms that are either looking to sell or would consider a sale is growing as well. 

But with all of the hustle that comes with increased activity and interest, it is easy to make a very common mistake.  When things start moving faster and the market is hot, it is easy to lose sight of a meaningful dynamic which every single buyer should fully understand: their own motivation and objectives. 

The caricatured view of active acquirers is often as a voraciously hungry beast looking for smaller prey to gobble up.  Having worked with hundreds of buyers and sellers, PSMJ has found that every company’s circumstances and motivations are unique.  And the success or failure of M&A efforts are largely determined by the alignment of the planning with the underlying motivations.  When these two start to drift apart, trouble can be lurking in the form of wasted time, stalled negotiations, or (even worse) post-transaction deal failure.

The best acquirers are often aware of their near-term strategic objectives and pursue opportunities based on some degree of awareness of where they want to go.  However, matching their strategic objectives against the abundance of target companies requires a level of understanding greater than just location, size and market segment.

What is missing from that statement, but critical to fully understanding the market, is that acquirers’ sizes, complexity and objectives are as diverse as the fish in the sea.  The best acquirers are as likely to be a large firm looking for unique talent or a geographic beachhead as they are to be a mid-sized firm seeking new service offerings or a seasoned principal aspiring to business ownership.  Nonetheless, the consistent qualities among the best-in-class acquirers are clarity of purpose, thoughtfulness of planning, and tenacity in execution.  They ask the hard questions such as:

• What does an acquisition get us that we cannot achieve through organic means?

• What are our must-have criteria versus our wish list?

• What does long-term success look like in three, five, or ten years?

• Who will be the deal champion through the process?

• Do we have the financial appetite to support an acquisition?

It is very easy, and very tempting, to believe that an opportunistic and ad hoc approach to growth will produce an exceptional outcome.  As with so many areas of life, fortune favors the prepared mind.  With sufficient introspection and planning, the likelihood of a successful acquisition and integration increases dramatically.

"Every battle is won or lost before it's ever fought" ~ Sun Tzu, The Art of War

About the Author: Dion Kenney, MS MBA  is a senior consultant in PSMJ’s mergers and acquisitions, valuation, and ownership transition practices. His approach is defined by recognizing the value of an organization aside from calculating its physical assets and multiples of revenues/profitability metrics. He can be reached at dkenney@psmj.com

Looking for more tips on branch office integration or on successful acquisition integration?  Don’t miss out on these upcoming two-day Roundtables designed specifically for A/E/C firm leaders:

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