Why Mergers & Acquisitions is Like Cooking

One of my first jobs growing up was as a kitchen assistant. Little did I know, what Markus the chef taught me about food and cooking would also apply to selling a business.

Markus believed that, independent of what you are cooking and what ingredients you have, you need to do the following to cook a great dish:

1) Have a plan or a recipe – An experienced chef often knows it by heart but rarely follows it verbatim.

2) Preparation – Have all the ingredients ready to go. Once you start cooking, you do not have time to prep.

3) Sequence – Certain steps need to be done before others. Carrots need to cook longer, and the oil should be in the pan and heated before the meat.

4) Attention to timing – Timing is critical. No one likes overcooked food.

5) Taste and season through every step – To get it perfect, you need to stop to taste and adjust throughout every step of the meal preparation.

6) Be creative – If you are missing an ingredient or you made a mistake during the process, don’t panic, be creative, ask the chef for advice.

As weird as it may sound, all these steps apply to a successful M&A transaction.

• Have a plan or a recipe – Whether you are a buyer or a seller, you should have a defined plan with clear objectives in mind before you start the process.

• Preparation – Once you start the process, things move fast, so being prepared and having information available is key to keeping momentum.

• Sequence – One of the biggest mistakes novice M&A participants make is that they do things out of order, like talking to a buyer before having clear transaction objectives or having the right information prepared.

• Attention to timing – Timing in an M&A process is critical, and is more of an art than a science. Each step in the process needs to be staged perfectly, balancing the need to maintain momentum while allowing buyers enough time to review material and perform analysis.

• Taste and season through every step – Throughout the process, you need to listen to buyer commentary and questions so you can make mid-course corrections and adjustments.

• Be creative – When things do not go as planned, you need to utilize your experience to find creative solutions or access experts to help out.

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One other thing that Markus taught me, and on occasion yelled: “If you cannot stand the heat, get out of the kitchen (and leave it to the pros)!” This couldn’t be more true in the M&A world.

As M&A professionals, we are master chefs that know how to cook delicious M&A transactions.