September 2010 - Association for Corporate Growth

COMMUNITY COMMENTARY
sideration of the less obvious stakeholders
(e.g., unions, local communities that might be
impacted by a plant consolidation and regulatory
bodies) is often useful in gauging subsequent
deal risks. Once the deal is scoped and
a preliminary time table set, one can identify
the necessary resources. In times past,
the cost of external deal resources could be
capitalized, but now with those costs
having to be expensed as incurred, one
must be far more sensitive to resource
allocation. Particularly where outside
lawyers and other professionals are engaged,
an agreed upon staffing plan and
detailed forecast of fees is now critical.
Where many law firms in the past have
resisted budgeting and reporting with
particularity, the more progressive firms are
adopting project management techniques
and increasing transparency in the way they
collaborate with clients on transactions.
The next step in the process is to break
down the components of the deal by task,
delegating single point responsibility for each
task to a team member and setting a delivery
deadline. While every deal is different, having
a set of standard deal process templates
identifying the typical deal steps is a useful
starting point. In our practice, we have developed
process templates for asset and stock
purchases and financing transactions. Drawing
on those templates as a starting point, we
are then able to customize our actions and
tasks for a particular deal. In addition, while
identifying tasks upfront is helpful, new challenges
always arise and being able to identify
the appropriate (and available) resource
is key to advancing the deal.
In the course of a transaction, it is important
to be ever-sensitive to risks and issues
that can imperil, delay or force changes in
a deal. Identifying the potential risks at the
outset of a transaction better enables dealmakers
to address and counter them. What
if required financing or an important governmental
authorization cannot be secured?
What if due diligence reveals that important
intellectual property of the target company
has not been properly protected? Acquiring a
company is a dynamic exercise—the project
management mechanisms must be flexible
enough to adjust to continuing changes and
keep team players abreast of those changes.
Once a deal closes, it is important to conduct
a post-closing assessment. Such “After
Action Reviews” focus on what happened,
“There is a growing impetus to
manage deals with a higher level
of transparency, accountability,
predictability and efficiency.”
why it happened and how the deal team can
do it better next time. Such an exercise not
only allows the team members to learn from
their mistakes and make improvements to
their process for the next deal, it can be vital
to the businesses in question. For example,
armed with knowledge gained in diligence
and negotiating and closing the transaction,
a buyer will be able to more effectively integrate
the acquired business unit. In addition,
deal costs should be analyzed to determine
where efficiencies can be achieved in the future.
These reviews should be conducted as
soon as possible after closing to best capture
and memorialize the teachings of the transaction.
Where you have used outside counsel or
other professionals, compel them (at no cost)
to join you in these assessments.
Helmuth von Moltke, a famous Prussian
field marshal, famously stated that “no
campaign plan survives first contact with
the enemy.” The same could be said for any
M&A transaction. While initial plans, risk
assessments and budgets are critical, every
deal is a dynamic process with twists and
turns and starts and stops. To be able to effectively
manage a significant matter with a
large number of resources and stakeholders,
there are a multitude of basic tools, as well
as advanced applications and tools that can
be used to manage and report on the status
of a deal.
There are many tools that enable users to
smoothly facilitate such processes, such as a
low tech “Information Radiator,” a large visual
task board where a team at one physical
location can view and update tasks, to Microsoft
® Project, with its robust project management
capabilities. Similarly, standalone Gantt
charts and network diagram software
programs are available to those who
want to use some of the essential tools
used by project managers. Increasingly,
web-based collaborative tools like
Basecamp ® and Onit (in beta testing)
are being deployed to manage and communicate
tasks and milestones.
Even Microsoft Outlook’s capabilities
can be leveraged to conduct basic project
management. In our practice, we have developed
a “Deal Dashboard,” which we describe
as our one-stop collaboration and accountability
workspace. Using the Dashboard,
we sit down with clients at the outset of a
transaction to identify the tasks (often using
our process templates), set deadlines and assign
responsibilities. On day one, we begin
to build a closing agenda, pulling template
documents from our form library. As the deal
takes off, the Dashboard becomes the nerve
center of the deal where issues are identified
and addressed, document drafts are turned
and stored and milestones are tracked.
As with any large endeavor, M&A transactions
can clearly benefit from the discipline
of even the very basics of project management.
Project management is a highly developed
discipline that offers far more that can
be applied to doing deals than has been summarized
above. That said, using even basic
techniques and tools can result in streamlining
the process as well as cutting transaction
costs and time to signing and successful
closing.
Byron Kalogerou is a partner and Dennis J.
White is senior counsel with the Boston office
of the international law firm of McDermott
Will & Emery LLP
September 2010 MERGERS & ACQUISITIONS 47