Structuring Corporate MA Departments in Large Corporations

Corporate Development and MA (Mergers and Acquisitions) departments play a pivotal role in the strategic growth of large corporations. However, the common misconception is that these departments make or break deals.

Understanding the Role of Corporate Development and MA Teams

These teams are primarily responsible for diligence and often act as an intermediary between potential buyers or sellers. Their goal is to gather information and analyze it to determine the potential fit of an acquisition or investment. It is crucial for founders and startup leaders to understand this role, as it can help foster better communication and collaboration.

When a Corporate Development professional reaches out, it is advisable to take the meeting and listen to their suggestions. They are not necessarily driving the process, but they can provide valuable insights and help guide the discussion towards mutually beneficial outcomes. Key business owners, such as an SVP of a group or an organizational leader, often make the ultimate decisions on smaller acquisitions, while the CEO herself handles the big deals.

The Structure of MA Departments

A well-structured MA department in a large corporation may include several key components:

Strategic Planning: This involves identifying and analyzing potential strategic fits and outcomes. It is about understanding the future direction of the company and how acquisitions or investments can contribute to that. Diligence: This includes financial, operational, and legal due diligence to ensure that all the necessary information is accurately presented. Commercial Due Diligence: This focuses on the day-to-day operations of the company and its ability to integrate with the acquiring company. Legal and Regulatory Compliance: Ensuring all legal and regulatory requirements are met is crucial before any deal can be finalized. Post-Merger Integration: This phase involves planning and executing the integration of the acquired company into the acquiring company's operations.

How Corporate MA Teams Facilitate Acquisitions

Corporations often seek to acquire startups or small businesses to tap into emerging technologies, expand their market share, or enter new markets. MA teams are instrumental in this process. They can sound out a founder's interest in a potential sale and determine whether the startup is structured in a way that makes an acquisition feasible.

Although MA teams do not make the final decision, their role in the initial stages of a deal is critical. They provide a framework for discussions and help determine the viability of a potential acquisition. Founders and startup leaders who understand the role and structure of these teams can leverage this knowledge to their advantage, ensuring a smoother and more productive interaction.

Building a strong relationship with the MA team can lead to better outcomes, as they can offer insights and advice that are not always available to the general public. By being proactive and transparent in the discussions, founders can increase the chances of a successful acquisition or strategic investment.

Conclusion

The role of corporate MA departments is often misunderstood. While they do not drive the entire decision-making process, they play a critical role in the early stages of identifying and analyzing potential acquisitions. Founders and startup leaders who understand this structure can benefit greatly from working with these teams, as they can provide valuable insights and help guide the negotiation process.