As the world slumps into the impending post-COVID19 recession, businesses all across the private sector will face trying times. Industries such as tourism, hospitality and entertainment will suffer the most as consumers hunker down to weather rising unemployment and inflating costs.
On the other hand, businesses in essential industries will continue to see bouyant or even increasing demand. Those who continue to perform well may see the opportunity to drive inorganic growth through well crafted M&A activity in a marketplace thirsty for capital.
For even the most seasonsed executives, these are unprecedented times and there is no real playbook for executing a well crafted acquisition when the dust settles on the post pandemic trading floor.
The guiding light for investors clamouring for direction in this market could come however from one of the greatest business thinkers of our time - Ariana Grande.
Her 2019 thought leadership piece '7 Rings', contains not only a popping bassline but also pivotal insights into post-COVID M&A strategy. Most importantly the chorus contains the four key steps in executing the perfect acquistion, in a single, catchy sequence:
A. Grande: "I see it, I like it, I want it, I got it"
I see it: Perform a wide ranging market scan to determine your ideal acquisition target, rely on key leading indicators such as sales orders placed to determine suitability
I like it: Identify the synergies of the acquisition that will drive value for your business and your customers. Is it the access to a new customer segment or a digitally enabled supply chain?
I want it: Make your intentions clear in the marketplace. Early discussions with the leadership of your acquisition target will often lead to better outcomes.
I got it: Make a strong, confident bid to ward off potential competitors and secure the acquisition.
Other key excerpts may also shed valuable learnings, or potentially lucrative industries to target:
A. Grande: "I bought a crib just for the closet"
While a potential acquisition target may play in non focus verticals, securing market winning capabilities in your focus vertical (i.e. the 'closet') and rationalising later is a winning move.
A. Grande: "Think retail therapy my new addiction", "I'd rather spoil all my friends with my riches" , "Never mind, I got the juice"
Online shopping, crowd sourced funding ventures and bottled goods will continue to provide a strong growth outlook.
With this framework CEO's can move into recessionary M&A activity with the confidence of a Dangerous Woman.
Join us again next week as we explore Grande's insights into the importance of a fast moving, agile business structure in "Thank u, next".
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