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News & Insights

Monday, 15 March 2021 | News

Vector Advisory Offers Complimentary M&A Integration Planning Tool

FORT LAUDERDALE, FL (March 16, 2021)

Growth and middle market focused consulting firm, Vector Advisory Services, has created a tool to assist business owners and sponsors in evaluating the important aspects of integrating businesses through mergers and acquisitions (M&A), helping support success.

Shelby Faubion, Founder and Managing Partner of Vector says, “Integrating businesses successfully can be very challenging. That is why I co-developed this 25-point assessment tool with Rohit Bassi, an experienced investor and operator both in early and growth stage companies, to help buyers strategically identify areas of focus and value for the business combination and contribute to their success.”

Vector is providing the M&A Integration Planning Assessment tool complimentary on its website (www.vector-advisory.com). The tool considers five key points of the primary pillars of any integration:

– Finance & Administrative
– Technology
– Human Capital, Leadership, & Culture
– Operations
– Sales & Marketing

Feedback on the tool has been very positive from the Private Equity sponsors and CEOs that have had the opportunity to leverage it for M&A transactions. Micah Dawson, Vice President Portfolio Support at Trivest Equity Partners, based in Coral Gables, Florida, says, “The tool is a simple, straight-forward, and effective way to draw attention to the post-close integration process early on – allowing our portfolio company leaders to anticipate and address needs to make the integration a success. This tool helps to bring resource gaps to light.” The CEO of Nationwide Property & Appraisal Services, Sri Velamati, says, “I used the tool in evaluating four acquisitions completed by my predecessor. The tool provided a framework to go back and revisit the target savings and benefits in core areas and identify how to capitalize on synergies to unlock the anticipated value of the transactions.”

For those in the growth and middle-markets, the ability to access premier integration resources is often limited. Seeing this need, Faubion established Vector Advisory in late 2020 to provide best-in-class M&A advisory and services that optimize the office of the CFO through an equitable pricing lens. “I wanted to contribute something to the marketplace to hopefully reduce the risk of failure. It matters to me to see business owners succeed, which is why I’m offering to sit with prospective buyers to understand their situation, to complete this assessment alongside them, and share ideas and best practices on integration planning and execution,” says Faubion.

According to many studies, the failure rate for combinations is well over 50%. A well-referenced Harvard Business Review article cited between 70 – 90% of acquisitions fail due to the inability to plan or execute the integration successfully. Providing further insight, a recent publication from Deloitte, M&A Trends, cited “effective integration” as the most important factor in achieving a successful M&A transaction. According to Faubion, the tool he created will take twenty minutes to complete but will save significant time and money by addressing the potential areas of misalignment or by planning for shoring resources in critical integration areas. Faubion says, “Expending this time up-front and, ideally, before closing, will significantly aid in a successful transition and help guard against those reported failure rates.”

The economic environment in which we find ourselves today is volatile and uncertain.  However, there is good news, as 2021 is shaping up to be optimistic for M&A activity. According to the 2021 BDO Middle Market CFO Outlook Survey, many CFOs are feeling optimistic about growth and the opportunity for M&A activity in 2021. According to the survey results, CFOs plan to proceed with deals in the following categories—29% PE investment, 24% M&A, and 20% pursuing an IPO. The Private Equity Predictions 2021 from BDO suggests that we will see continued momentum in M&A activity (which grew in 4Q20) and sectors that benefited during the pandemic are particularly desirable but will come at higher multiples. The Global Private Equity Report 2021 from Bain & Company reported deal multiples in the US are averaging over 11 times EBITDA. These high multiples provide little room for missteps through the combination process and planning up-front is critical for companies to deliver on expected returns.

 

About Vector Advisory

Vector Advisory is a preferred partner for lower- and middle-market private equity and family office sponsors, their portfolio companies and small- to mid-size businesses. Their mission is to cost-effectively equip small- to mid-size businesses to successfully navigate through their most complicated and transformative issues, delivering the best client service experience.

Headquartered in Fort Lauderdale, Vector Advisory focuses on supporting South-Florida-based private equity and family office firms with successfully executing buy-and-build strategies. The firm provides buy-side and sell-side due diligence as well as other post-closing services that accelerate enduring value, including M&A integration, interim/factional CFO, finance, and accounting process improvements. Vector Advisory boasts a deep bench of experience as the firm is led by alumni of some of the world’s top consulting firms, including the likes of KPMG and PwC.