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CEOs

3 Tweaks to Improve Your Corporate Development Strategy

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In an increasingly competitive market, corporate development teams must proactively and meaningfully connect with both CEOs and intermediaries to cover the market and get access to quality deals. Here are 3 strategies to supercharge your team’s corporate development strategy. 

1. Play the long game.

It is increasingly important that acquisitive companies demonstrate an interest in partnering with potential targets, rather than simply consuming them. In the current M&A landscape, there are far more active buyers than sellers, so sellers’ expectations are quite high, says CDI Global’s Jeff Schmidt in the CDI Global’s M&A Trends for 2016 Report.

Buyers must identify and build relationships with potential targets before they go to market. Building long term connections is crucial to deal origination and deal success.

The deal lifecycle between buyer and CEO must begin long before the teaser is received, especially for the corporate development function. Sellers now look to build a relationship with corporate development teams at acquisitive companies as early as possible — roughly three to 18 months in advance of a possible acquisition. During this time, CEOs aim to show acquiring companies their progress, give them time to recognize their true value, and build a relationship to confirm that they are selling to the right buyer.

Corporate development teams who are diligent about identifying and connecting with companies before they publicly market themselves will prove victorious in the current M&A landscape.

2. Flip the script.

The next time an investment banker calls someone at your company to see if you’re interested in selling, don’t hang up the phone.

Instead, flip the script.

Inform the banker that your company isn’t looking to be acquired, but you are looking for acquisition targets.

The banker could be representing a deal that fits what you’re looking for at this very moment. Even if he doesn’t have the right deal now, he could in the future. So get to know the gatekeeper. For dealmakers, with bankers is key to unlocking proprietary deal flow.

3. Think scalability.

Wherever there exists marketplace dispersion, increased interconnectedness will typically accelerate efficiency and reduce costs for all parties. For example, in the short-term apartment rental sector, products like Airbnb have increased options for apartment owners and improved pricing for subletters. In the job search market, LinkedIn has amplified employment success for job seekers and close rates for recruiters. In the private capital markets, deal sourcing networks deliver access to a large swath of deals across a wide quality spectrum (i.e., both auctioned and proprietary transaction opportunities), providing benefits for buyers and sellers.

Without consistent high-quality deal flow, all other M&A efforts are meaningless. Online deal platforms offer the benefits of a passive safety net — making sure you never miss a perfect deal in your network — plus a suite of active tools to more effectively canvass micro-industries and niches which previously may have been too expensive to cover. With deal platforms, teams at every stage of maturity can gain direct access to a wide range of opportunities and improve their corporate development strategy. 

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