'Quick and efficient deals' are in vogue, says ansarada's Arie Maree
How companies can be deal-ready when an opportunity arises.
“Short, sharp due diligences are the norm for mergers and acquisitions (M&A) lately,” says Arie Maree (pictured), Head of Middle East & Africa at ansarada.
“The average time in data rooms used to be between three and six months, but now we are seeing a lot more two-month processes.”
Ansarada is a provider of virtual data rooms for business transactions, fundraising, IPOs, tenders and M&A.
As regional boss of the company, Arie is better placed than most to comment on the vibrancy of the economy. He says there has been a lot of renewed confidence and foreign investment around the leadership change to South African president Cyril Ramaphosa, but also notices “a new sense of cost-conscious behaviour and trepidation” as the result of land redistribution becoming a hot political topic.
According to Arie, “quick and efficient deals” are very common at the moment, while another big trend he is seeing in the M&A space is that companies need to permanently be deal-ready and able to present themselves at any given time.
“People really want to have their ducks in a row on an ongoing basis, so when the opportunity arises there are no nightmares or an absolutely crazy phase which creates a lot of stress.”
Arie says, shorter due diligences are a global phenomenon, which is also spurred on by artificial intelligence and machine learning, which are both applied in ansarada’s data rooms.
“It also addresses the friction between corporate executives and advisors. The executives also have a day job to run the business. We are working hard to minimise the demand on them by creating efficient, collaborative processes. For that, we use scorecards and benchmarks, so everyone knows what good looks like for your deal and your industry.”
What makes a good dealmaker?
“If you look at dealmakers who deliver great results, you see people with the ability to manage complexity very well,” says Arie. “Good dealmakers drive simplicity and don’t get swamped by massive due diligence. They also have a gut feel for where to look and spot a good asset and they are able to deliver.”
To be a good seller is also an art in itself and Arie believes that timing is crucial.
“You want to present the right stuff at the right time to the right people. Successful presentations are agile and adapted to the audience. We see a lot of big deals fall over because of bad deal prep from the seller’s side. A poor presentation can also severely impact the multiple that you get. Good dealmakers run a very tight ship and leverage expertise of good advisors.”
CFO is pivotal
Results of the CFO Day Survey, unveiled on page 16 in this magazine, show that 92 percent of CFOs feel they should be more involved in M&A and 79 percent expect dealmaking to increase in importance compared to organic growth. Arie agrees and says the CFO is pivotal.
“They are at the epicentre, whether it is a finance raise or M&A. CFOs have the absolute overview and, in most cases, they drive the whole process.”
Efficient delegation is often a characteristic of good CFOs, notes Arie.
“CFOs should be driving efficiency, getting subject matter experts in to execute and embracing technology where needed. Personality still plays a massive part as well in dealmaking. You can be a clever kid who gets top marks, but can’t find a date for the dance. A good CFO can do both. People like to deal with nice people.”
Ansarada itself has a big focus on the deal-readiness of corporates, even after a previous deal has just been concluded.
“For example, after a massive listing or very successful transaction, we often find that data and representation of a business starts deteriorating. We are focusing on agility. Our one main goal is to optimise potential and preparation in whichever stage of the dealmaking.”
This article was first published on CFO Magazine. The magazine can be read here.