Plenty of companies have an acquisition strategy. However, having a strategy and implementing a strategy are two different things. 

Companies always plan to acquire new companies, but never actually close a deal. This isn’t because the acquisition thesis or strategy was wrong; the problem is that nobody found the time to execute it. 

That’s why M&A execution and an M&A strategy are two different things. Usually, companies are only good at doing the second. 

Why M&A Execution Fails Without Dedicated Resources

An acquisition plan normally fails because it’s a full-time job assigned to people who already have one. 

Creating a thesis, sourcing targets, screening teasers, calling brokers, chasing follow-ups, reviewing CIMs, and so forth take time. Individually, they’re small tasks; however, they can cost hours per day for months or years. 

It cannot be performed by someone who already has full-time commitments. It needs to be given to someone whose specific job is to source, review, and acquire companies for the business. 

McKinsey did some research on this as well. They found that companies that treat dealmaking as a continuous capability rather than an occasional event consistently outperform their peers. 

The Bandwidth Bottleneck in Corporate Development

Most lower middle market acquirers don’t have a corporate development team. They have an executive doing corporate development on the side. This mix, however, causes a competition for hours. 

Core Operations 

The day job needs to come first. Customer escalations, quarter-end, staff need meetings, and fires need fighting. Each of these tasks has a deadline, a consequence, and someone waiting for an answer. 

These day-to-day jobs require energy, some more than others. By the time you get to the important stuff, like creating a buy-side strategy, deal negotiations, or screening teasers, most of the ‘quality’ energy has been used up. 

Deal Sourcing 

Unlike core operations, deal sourcing isn’t a ‘must’. Too busy today? Fine, do it tomorrow. No teaser punishes you for ignoring it, no broker complains when a follow-up takes a week longer, and outreach can get done when it gets done. 

The work is, without question, very important. However, it’s never urgent. And when an executive is running an extremely busy company with multiple moving parts, never-urgent translates to never-done. 

The Conflict Between the Two 

When the two compete, operations wins each time. Nobody gets fired for missing a teaser, so the pipeline slips. 

The cost, though, starts to compound. Deals get missed, competitors get ahead, and the company struggles to grow. 

Keeping Momentum to the LOI

If nobody is dedicated to closing deals and it’s approached like a part-time role, sellers notice. 

A founder who’s decided to sell, often their lifelong work, wants certainty. They don’t want to wait weeks for a buyer to return a call, cancel a management meeting for a board deadline, or go quiet after the CIM. 

Speed matters more than most sellers realize. McKinsey found that the media time from signing to closing is 6.4 months. Not massively short, but you’re competing against other buyers as well, maybe even those with decided teams. 

Transaction velocity at such a stage is a competitive weapon. It could even be the weapon needed to beat a competitor. Sometimes, the responsive buyer is the one the seller wants to go with if price isn’t a huge deciding factor. 

How Dedicated Deal Execution Works

Working alongside an advisory firm helps provide transaction velocity in deal execution. They take the job away from executives and execute on the strategy themselves. 

They take away three types of jobs: 

• Pipeline Management 

Every target lives in a tracked pipeline with a status and a next action. Nothing sits untouched or pushed to one side. This is their one and only focus, so not a single thing gets delayed. 

The pipeline runs on a strict schedule and actually gets implemented. For a busy executive, trying to cut corners and find time to manage their deal pipeline simply doesn’t leave them time to give it their full energy. 

• Outreach and Follow-Up 

Cold outreach, replying to brokers, and following up on late replies is part of the acquisition game. If someone doesn’t have time for it, it doesn’t get done. If it doesn’t get done, no acquisitions are made. 

It’s unglamorous work, but it’s work that keeps the buyer credible and in the top of a seller’s mind. An advisory firm takes this delegation and keeps on top of it, just as it should be to ensure success. 

• Target Evaluation 

Incoming deals can then be screened against the buyer’s written criteria, and deals that survive these get preliminary vetting before they ever reach a decision-maker. 

Because of this, the decision-maker only spends time on real, possible acquisitions. Nothing that “could” be a target, but something that “can” impact the business.

Turning an Acquisition Thesis Into Daily Action

An acquisition thesis like “acquire complementary service businesses in the Southeast” is just a direction. It’s not a plan, as it doesn’t have execution instructions. 

The thesis is the map; the execution stages are the roads. Together, they get you to where you need to go. Separately, they’re pretty useless. An advisor takes your acquisition thesis and develops a step-by-step program to develop the full map.  

For example, alongside purchasing criteria like size, geography, margin, customer concentration, etc., there are criteria for when the pipeline gets reviewed, when dead targets are closed, and so forth. 

Where OCX Advisors Comes In

Many companies looking to acquire a company are good at creating a strategy. They know what they need, where they need it, and the price they’re willing to pay. The issue, however, is implementing it. 

That’s the gap we fill at OCX Advisors. You own the thesis, but we run the machine, ensuring the pipeline is managed, brokers are reached out to, and screening is performed. For more information about how we can help, contact us today.