In highly competitive markets, mergers and acquisitions (M&A) are par for the course. The biggest brands and operators look to strengthen their hands by taking innovative newcomers under their wing, diversifying their product offerings in the process. The iGaming industry is a prime example of this, with a string of conglomerates dominating the marketplace, underpinned by their successful M&A strategies. One of the most recent high-profile acquisitions came in July 2017, when Swedish firm Kindred Group bought 32Red in a deal worth £176m. Ironically, 32Red had acquired a string of firms along its own growth path. The iGaming food chain was such that 32Red was then swallowed up by Kindred Group, who appear to have maintained its quirky user experience and informal branding which users had come to expect.
That’s one of the biggest challenges for businesses that acquire additional firms and amalgamate them under their umbrella. Maintaining their point of difference is important to ensure their continued appeal to the customer base that made them so successful in the first place.
Equally, there are several big hurdles for growing businesses to overcome if they want to prepare themselves for a lucrative M&A sale. Below, we’ll run through some of the key ingredients needed for a business to encourage a life-changing acquisition.
Promote the story of your business, not only your services
Some of the best M&A stories revolve around companies that have compelling brand stories, as well as great products or services. Try to cement your brand as a thought leader in its field. Secure speaking slots at conferences and seminars in your niche. This allows your senior figures to articulate the message of your business and its approach – without having to take the hard sell.
Ensure draft disclosure schedules are ready
Inadequate or incomplete disclosure schedules have the potential to put the brakes on any takeover negotiations. They can result in a breach of the initial acquisition agreement, resulting in prospective buyers walking away. Well-drafted disclosure schedules are key to giving sellers the protection needed from potential allegations post-closure regarding warranties and/or misrepresentation.
Build an advisory board to grow your network
Fostering an acquisition of your business takes time. It begins with cultivating leads and nurturing connections. One of the best ways to do this is to create an advisory board of senior and influential figures who have the network to get your business in front of the right people; these people hopefully have the capital and desire to then invest in ambitious, growing companies like yours.
Seek legal advice with seasoned expertise in M&A transactions
Last but by no means least, it’s always important to pay for a lawyer with a specialty in M&A negotiations. A buyout agreement is by no means a cakewalk. It’s a multi-dimensional deal with a host of structures and legal issues to navigate. An experienced M&A lawyer can take some of the strain, working proactively to pinpoint any potential bumps in the road and recommend practical solutions to keep any deal alive.