M&A Best Practices: 5 Lessons From Top Advisors

Every M&A Deal Tells a Story

Mergers and acquisitions (M&A) are transformative moments for companies. Whether it’s a founder selling the business they built from the ground up or a buyer aiming to expand their portfolio, each deal carries unique challenges and opportunities. While no two transactions are identical, the lessons learned from seasoned advisors can guide others through this complex process.

This article distills insights from top advisors at Boopos, sharing stories, strategies, and practical wisdom to help founders and companies navigate the intricate world of M&A.

"Every deal is as much about people as it is about numbers. The human element often defines the success or failure of an M&A process." - Juan Ignacio García, Founder & MD of Boopos, with more than 20 years of experience in the M&A industry

Best M&A practices: 5 Lessons from top experts

Lesson 1: Preparation is everything

One of the most critical stages of the M&A process happens long before a deal is on the table: preparation. Companies that succeed in M&A are those that start planning early, ensuring their operations, financials, team, and growth narratives are well-documented and compelling.

Story: A SaaS founder’s journey to sale

A SaaS founder approached Boopos to explore a potential sale. At first glance, their financials seemed solid, but deeper analysis revealed inconsistencies in their revenue recognition practices. Addressing these discrepancies not only avoided red flags during due diligence but also increased their valuation.

Key Takeaways:

• Clean financials: Ensure your books are accurate and transparent. Engage a trusted advisor to audit your financials before presenting them to buyers.
• Documented processes: Having your processes, tech stack, etc., properly documented ensures buyers are able to transact with confidence.
• Team preparation: Train your team so they can operate the business without your daily involvement to remove the founder risk from the equation.
• Clarify your narrative: A cohesive growth story backed by data makes your company more attractive.

"Preparation is the foundation of any successful M&A deal, and going to market with well-prepared materials is the duty of competent advisory. Comprehensive information not only attracts better offers but also reduces turbulence in diligence." - Alex Fakhre, Senior M&A Advisor

Recommended: The Sell-Side M&A Process: A Guide to Understanding Every Stage

Lesson 2: Relationships drive deals

While numbers matter, successful M&A often hinges on relationships. Buyers and sellers who establish trust and alignment early are more likely to navigate challenges effectively.

Story: The value of shared vision

In a recent deal involving a SaaS company in the data analytics space, the buyer’s offer wasn’t the highest, but their understanding of the business and ability to convey an exciting growth plan resonated with the seller. This vision led to a smoother negotiation process, closing the deal within 60 days since buyer and seller were connected by Boopos—a deal both parties celebrated.

Key Takeaways:

• Prioritize alignment: Look beyond price to assess cultural and strategic fit, especially if you plan to remain involved in the business post-acquisition.
• Communicate openly: Transparency fosters trust and minimizes misunderstandings.

"Trust and alignment are the cornerstones of a successful deal. When both parties see eye to eye on the future, the process becomes far more collaborative and rewarding." - Andrea Balletbó, Senior M&A Advisor & Head of Partnerships

Lesson 3: Managing emotions is crucial

M&A is deeply personal, especially for founders who have poured years of effort into building their businesses. The emotional stakes can cloud judgment, create friction, and lead to hasty decisions if not addressed thoughtfully.

Story: Letting Go

A founder struggled to part with their company, fearing the loss of identity tied to their business. One of Boopos’ advisors took the time to understand these fears and reframed the sale as an opportunity for the founder to focus on new ventures and personal goals. This approach helped the founder decide and ensured the deal’s success.

Key Takeaways:

• Acknowledge emotions: Recognize that selling a company can feel like losing a part of yourself. Address these feelings openly and constructively.
• Reframe the narrative: Viewing the sale as a step toward new opportunities can help alleviate anxiety and resistance.
• Lean on your team: Trusted advisors can provide an objective perspective, helping balance emotional responses with practical decision-making.

"Selling a company is as much an emotional journey as it is a financial one. Balancing those emotions with clear-headed decision-making is key to a successful outcome." - Ignacio Villanueva, Senior VP, M&A Sales

Lesson 4: Due diligence is when the hard work begins

Due diligence is often the most rigorous phase of the M&A process, where the burden of proof shifts to the seller. While trust is built during the preliminary calls, sales process, and negotiation stages, due diligence verifies and ratifies that trust, ultimately leading to a binding purchase agreement.

Story: Turning scrutiny into strength

A tech company preparing for sale faced tough questions about their customer churn rate, which was higher than ideal. By proactively providing detailed metrics and actionable plans already in place to address churn, they turned a potential red flag into a testament to their data-driven culture and operational strength. Advisory took a supportive role during this stage, ensuring the seller could meet the buyer’s demands for clarity and proof.

KeytTakeaways:

• The seller’s burden of proof: Due diligence is where sellers must demonstrate the credibility of their financials, operations, and growth story.
• Proactively address weaknesses: Identify and mitigate potential concerns before buyers uncover them.
• Advisory as support: While advisors drive earlier stages of the process, during due diligence, they play a supporting role to help sellers meet buyer expectations.

"Proactive transparency in due diligence is essential. By addressing concerns upfront, you build trust and significantly enhance the likelihood of a smooth and successful deal process." - Carlos Muñoz, Head of M&A Analytics

Lesson 5: Negotiation is an art

Successful negotiation is about finding a balance where both parties feel they’ve achieved their goals. The most effective negotiators focus on long-term outcomes rather than short-term wins.

Story: Navigating earn-outs

In one high-stakes deal, a gap between the seller's valuation expectations and the buyer's assessment of the business threatened to derail the transaction. The Boopos team proposed an earn-out structure that allowed the buyer to defer a portion of the purchase price, contingent on the company hitting specific performance milestones. This approach reassured the buyer while enabling the seller to achieve their desired valuation if the business continued to perform as projected. This earn-out structure bridged the gap and ensured the deal moved forward smoothly.

Key takeaways:

• Focus on the big picture: Prioritize what matters most for long-term success.
• Be flexible: Creativity in deal structures can bridge gaps during negotiations.

"Understanding the concerns of the other party is the cornerstone of successful negotiation. When you listen actively, you can craft solutions that work for both sides and build lasting trust." - Manuel Amor, COO 

M&A wisdom from the trenches

M&A is a complex and nuanced journey. Each deal carries lessons that can guide the next, and those lessons often come from the trenches of real-world experience. Whether it’s preparing meticulously, prioritizing relationships, managing emotions, or planning beyond the deal, these practices help pave the way for successful transactions.

An M&A deal isn’t just a transaction; it’s a milestone in a company’s story. The best advisors help write that story—one chapter at a time.

At Boopos, we specialize in helping tech founders navigate M&A deals in the $5M-$100M range. If you’re considering an exit, reach out to our team of experienced advisors. Start with a complimentary valuation session to explore the possibilities for your business. Learn more here.