The Middle-Market Deal Execution Process: What It Takes to Succeed

The Middle-Market Deal Execution Process: What It Takes to Succeed

In a Rapidly Changing World, What Does It Take to Make a Deal a Success?

With new generations entering an industry that has seen significant change just over the past few years, mergers and acquisitions in the middle market is a complex space where different perceptions, approaches, and values are intermingling — creating greater complexity and new challenges.

Notably, according to research from EY, the Millennial generation makes up the largest portion of the M&A industry. This generation varies, in some cases wildly, from its Gen X and Baby Boomer predecessors. As an example, Millennials are more focused on building their careers faster. And at any time, around 30% of Millennials are actively seeking a new role. This represents a shift from a focus on the job to a focus on the self.

This dynamism has a significant impact on the overall deal execution process, and with a variety of factors continuing to impact dealmaking, there’s never been a more important time to refocus on the fundamental values of this industry.

Here, we’ll share our perspectives and recommendations that are built on 25 years of successful partnerships and transactions across a variety of service lines and industries. We hope they’re useful for your team as you seek to streamline your deal execution process.

3 Fundamentals in a Successful Deal Execution Process

1. Focus on Relationships

Whether you’re of the Millennial, Gen X, or Baby Boomer generations, it’s important to understand that there is more to investment banking and M&A than the financial aspects. At its heart, this is an industry focused on people. People build the businesses that we have the privilege to represent in transactions. People create the innovations and strategies that lead to growth. People make the strategic decisions that impact countless others.

Because of this, M&A professionals — whether new to the industry or a veteran — should always keep in mind what it is they’re seeking to do: assist in the purchase, sale, or merger of a business that has real people working for it. Everything those people worked to create and establish has value, and our role is to seek to maximize that value. This people-first focus will go a long way in helping to make the deal execution process successful.

2. Pursue Opportunities Relentlessly

One thing that we have learned over our 25 years in business is that the deal execution process requires consistency, resilience, and dedication in order to achieve the desired results. You may find the perfect buyer or seller for your client, but situations and circumstances are not always what they appear.

Case in point — a healthcare deal that we engaged in required four attempts to complete. This was not due to any fault from our team, but rather changing circumstances with our client that led to shifts in the desired goal and thus our approach. In that case, what started as sell-side M&A support turned into a distressed transaction. Regardless of the circumstances, we relentlessly pursued opportunities to help our client achieve their goal. As we said above, consistent effort was required, but that effort paid off for everyone involved. The lesson here is that there are no easy paths to success. Hard work is always required, but that hard work brings with it meaningful rewards.

3. Every Opportunity is Another Opportunity

Closely related to the above items is the fact that the relationships that are built as part of an M&A transaction are long-lasting. As our firm has experienced, building strong relationships brings reward in both the relationship itself and with future opportunities. Many of our most transformational deals came about as a result of our focus on building strong relationships and in pursuing success for our clients.

Deals should not be considered one-off opportunities, and relationships should not be built for the sake of deals. While we are assisting our clients with what is often one of the most important transactions of their lives and careers, we are building a meaningful professional network that can always be relied upon for insights and support. You never know what one successful transaction can turn into: multiple subsequent successful transactions, or perhaps even the best friendship of your life. The first transaction done with Jeff Church resulted in the birth of MelCap, and several other successful transactions together.

At MelCap Partners, People Come First

From helping to advance the careers of our own team to remaining friends and partners with those we work with over the years, everything we do at MelCap Partners revolves around people. With dozens of successful transactions over our 25 years in business and a full suite of investment banking and advisory services, you can rely on our team for advice and support that is focused around you, your team, and the legacy you worked so hard to build throughout your career.

Connect with us today to learn more about our capabilities and how we can build something meaningful together.

By Al Melchiorre

Al founded MelCap Partners in 2000, and is responsible for managing all aspects of client engagements from proposal through closing, developing business, reviewing offering memorandums and financial models, negotiating purchase agreements, and interacting with buyers and investors.