M&A Practical Insights: A CFO Action Guide from Due Diligence to Integration
RoseRyan President David Roberson, based on his practical experience with the company's acquisition by ZRG, distills four key points in M&A—'cast a wide net, set priorities, prepare for all contingencies, and plan for the long term'—and provides actionable recommendations.
As an executive at one of the thousands of companies that completed a merger or acquisition this year, I've reached a conclusion: every deal is unique. No matter how many acquisitions you've been through, you can't predict everything that will happen. But you can rely on past experience and the expertise of others to make the process as smooth as possible and keep unexpected problems to a minimum.
At RoseRyan—a financial and accounting consulting firm with 120 employees, acquired in April by global talent consulting firm ZRG Partners—the process began with the premise: how do we elevate this nearly 30-year-old company to new heights? Demand for our services was exploding at the time, but we knew our existing capabilities and infrastructure wouldn't keep up in the long run. ZRG provided us a path to significantly expand resources and opportunities while preserving our core business and employees, as we became part of a larger, more global company.
Here are some steps that worked for us, which can help CFOs embarking on a merger or acquisition journey:
Cast a wide net and do deep research
Due diligence isn't just for researching the company you're about to acquire or join. Once your company realizes strategic change is on the horizon, dig deep into the various options available. Exploring who might be interested in your company and their vision for its future not only reveals possibilities but also reflects the company's true value, whether your goals are feasible, and the extent to which they can be achieved.
Clarify priorities
What is the primary reason for pursuing the deal at this point? Has a talent shortage severely hindered growth plans? To what extent do you want to preserve the company as it is? Are the founders considering retirement? If nothing changes, will the company stagnate? Clarifying this answer will help you make judgments during the research and decision-making phases.
Be fully prepared
As CFO, you know this falls within your scope of duties, but accepting it helps you stay calm during busy times. There will always be surprises—such as last-minute requests that could threaten the timeline or even the entire deal. Think about how many deals were put on hold earlier this year when the Russia-Ukraine conflict created uncertainty (according to Pitchbook data, about 4,739 deals were completed in the first quarter, totaling $611.3 billion, down 20% quarter-over-quarter, lower than previous expectations for a frenzy of M&A activity).
At this point, past experience and best practices can guide you—anticipate the questions the acquirer might ask so you can prepare comprehensive, satisfactory answers and solutions in advance. Before the process kicks off, you can have another team carefully review your financial data to help anticipate any issues that might arise.
Look beyond the signing
Most of your energy will go into negotiating terms and securing financing, but also think about what happens after the deal closes. Maintain close communication with the acquirer and start understanding how their processes and systems will integrate with yours. In the short term, sort out communication matters—from press releases coordinated with the acquirer to the strategy and timing for announcing the news to employees, clients, and potential clients.
For example, in the days leading up to the deal, we prepared emails, meeting talking points, FAQs, and an explanatory video for employees. The video format allowed RoseRyan founder Kathy Ryan and me to quickly explain the announcement to a dispersed team while conveying our excitement and commitment to this new phase of the business. We then held multiple meetings, some involving the whole company and ZRG leadership, while others were deliberately kept small, designed for those who preferred to ask questions of Kathy or me in a group setting.
Therefore, I recommend considering the impact when the news finally lands: some employees will be surprised and may need time to digest what this change means for the business and their roles. Think ahead about the types of questions employees might ask. Your answers will set the tone for 'day two'—the day you all become part of a new entity together.