Define an Acquisition Plan
Growing a company via acquisition must be evaluated against using the same resource (time & money) to grow it organically. Both have their pros and cons, or maybe a dual strategy makes sense. Creating a plan to grow what you already do (scale) or adding services/products to your offering you don’t currently provide (scope).
Find, Filter and Approach
Prospects will come from internal and external sources. Having a specific process and pre-defined roles to evaluate them sets the ‘tone’ for the rest of the relationship. A smooth, professional approach, creating simplicity out of the perception of complexity will establish you and your company as a serious buyer, even if it’s your first time.
Due Diligence
At this point, you have a formal agreement, in the form of an NDA and LOI. It’s an exciting time. Due Diligence is critical to validating assumptions, asking the right questions, defining the strengths and weaknesses. It is the buyer’s opportunity to completely understand what they are buying. There is no other opportunity to do this; You can never be thorough enough to both identify the value and set the acquisition up for success post-deal.
Architect the Proposal
No proposal gets created without knowing the value of the company. In addition to due diligence data, external market factors and recent comparable transactions drive the valuation. Get an external source to do it, they have more data than you, and now is the time to get your legal docs created. The proposal is just the starting point to define what the buyer is willing to pay and it starts the negotiation process.
Document, Negotiate, Close
It’s necessary to be formal at this stage. It’s also important to keep the deal simple. Be focused on being detailed in your research, valuation, deal terms, integration plans, not on building a ‘deal of the century’ that is going to be confusing and fail. This is the stage that should be easier, don’t make it harder.
Integrate, Integrate, Integrate
Integrating processes and systems is hard, but not the most important. Bringing together leaders from two companies into an organization, defining roles and goals, and having a unified, collaborative culture will make or break any deal, regardless of how the previous steps have gone, this is where a deal fails or succeeds. Success is defined by the results, not by the signatures on deal documents.
”Explain the value and justify the cost - People don’t mind paying; they just don’t like to overpay.
Chris MurraySelling with EASE
”You've got to think about big things while you're doing small things, so that all the small things go in the right direction.
Alvin TofflerAmerican writer, futurist, and businessman
”I have never cared what something costs; I care what it's worth.
Ari EmanuelTalent Agent
Understanding the Acquisition Curve
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1. This is the stage when you are looking for a company. This is where you define whether you are going scope or scale. Scope adding services to what you do not do, or scale, adding services to grow what you already do.
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2. Narrowing down a few opportunities, doing an LOI, NDA and starting the due diligence process. This is where you will succeed or fail. Don’t let assumptions, no matter how small become facts. Your due dilligence shapes both the deal AND the integration plan.
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3. Uh oh. Reality is here, the pain (y) to the P&L and emotional effort is very high. The CFO is involved now and asking questions. The ‘slope’ of the curve defines how many meetings you’ll attend to explain the problem.
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4. People are usually fired here, and the founders of the acquired company want to renegotiate their earn out (or quit). This is a serious time, where a public company might need to provide the pubic a negative update on M&A results. No joke here. It impacts stock price or if private, the future value of your company.
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5. Most don’t get here after hitting the valley (#4). It usually takes external resources to fix it, renegotiate earnouts and daily project meetings. A KPMG study indicates that 83% of merger deals did not boost shareholder returns
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6. This is the goal, making an acquisition to add value, on the P&L and future forecast (both of which are part of company valuations). It also can be done without the emotional pain, physical effort and meetings to prepare for other meetings.
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7. Few get here. The path isn’t that hard, just needs to be proactive at Step 1. Invest in a team that is tactical in their approach, makes no assumptions and is motivated for future success, not just getting the deal done. Schedule time with CoPilot
A KPMG study indicates that 83% of merger deals did not boost shareholder returns. It can be avoided, just need to be proactive with the right team, with the right experienced aligned with true success, not just getting the deal done.
Schedule an AppointmentContact UsTake SOE Assessment
”When you see a merger between two giants in a declining industry, it can look like the financial version of a couple having a baby to save a marriage.
Adam DavidsonCo-Founder NPR Planet Money
”Every single time you make a merger, somebody is losing his identity. And saying something different is just rubbish.
Carlos GhosnBrazillian Businessman
About Dave Armstrong
Human | Veteran | Educated | Experienced | Engaged
Overview
18+ years of C-Suite financial & operational leadership across multiple industries. Expertise in transformation, scaling, integrations and growth. Deep experience in collaborative problem solving and business transformation as the CFO. Consistent and calm leadership believing that a collaborative environment and culture is key to guide teams to seek out possibilities and work together to achieve goals.
Human
I’m a decorated combat veteran and a first-generation American. The difficult and dangerous path my grandparents took to get here motivates me to not waste this privilege. I value personal relationships. I find I approach most things by being creative but realistic, enthusiastic but disciplined, and optimistic about improvement or finding a solution to any problem.
My career started when I joined the military out of high school in 1986, the US Air Force, and during my enlistment I completed my bachelor’s degree. I served in war-time combat operations during the 1990-1991 Desert Storm, making lifelong friends along with establishing my core values that solidified then and continue to this day. I was a corporate employee for ten years from 1995 to 2005, I earned my MBA, then in 2005, I left my high-profile corporate role and turned my real passion of helping others grow their own business and create generational wealth.
My experience and results come from leading and mentoring teams. As a multifaceted C-level executive, I’ve invested my time and money into things that make a difference; healthcare, education, energy, etc. In addition to my investing, I’m an independent consultant working with companies in a CEO/COO/CFO role to plan and direct the strategy, execution and fiscal control systems.
My clients see me as a helping hand that adds to their value, doing real work and ultimately delivering results, together. I’ve been told I’m a calm collaborator even under the most intense situations; difficult problems that would have caused companies to fall apart moved forward with my facilitation.
Military Service
The United States Air Force – Electronics Engineer 1986 – 1995
Desert Shield/Storm Combat Operations – 1990 – 1991
1991 Maintenance Professional of the Year – Combat Operations
Southwest Asia Service Medal – 2 Bronze Stars – Defense of Saudi Arabia / Liberation and Defense of Kuwait
Education
MBA – University of Phoenix – 1995 – 1997
BS – Embry Riddle University – 1987 – 1991
Community Engagement
Board of Directors/Founder – Second First Chance – 501c3 – 2023 – Present
Philanthropist – Soldiers to Sidelines – 501c3 – 2023 – Present
Philanthropist – South Dakota Service Dogs – 501c3 – 2023 – Present
Senior Mentor & Spokesperson – Warrior Rising – 501c3 – 2021 – Present
Entrepreneur Instructor – Federal Correctional Institution – 2022 – 2023
College Adjunct Professor – Arapahoe Community College – 2022 – 2023
Business Teacher – STEM School MIT LaunchX / DECA Judge – 2019 – 2020
Event Speaker and Mentor – Galvanize / Denver Startup Week – 2017 – 2019
Director of Football Operations – Oley Valley Football – 2007 – 2009
Youth Athletic Coach – Football/Baseball/Volleyball/Softball/Basketball – 1993 – 2017
Our Work
CoPilot engages to help you get things done. This is not enough. We help you get the right things done, which builds momentum. Momentum is measurable. You start at zero and by doing the right things you build a foundation for growth. This is what we do. Below are those for which we have helped. Each one has a story of effort, adaptation, and success.
Our Experience
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