Although world markets appear to be stalling, merger and acquisition activity in the UK remains strong. Experienced international interim Paul Siegenthaler takes a look at the potential opportunities for interims in the M&A space.
It’s hard to put a finger on exactly why M&A activity remains buoyant in the face of all the recent talk about a global slowdown.
In truth, it’s unlikely to be linked to a sudden surge in market confidence.A more plausible scenario is that many businesses have been sitting on their hands for several years whilst they couldn’t see clarity on the horizon and, as a result, have found themselves with a significant of accumulated cash.In the last year or so, they’ve begun to identify opportunities to re-invest and refocus – and for interims, this burst of activity is opening up a world of opportunity and potential.
In my experience, there tends to be three main functional areas in which interims benefit during a time of increased buying and selling activity: Finance, HR and IT.
The most obvious, financial opportunities, tend to arise because the team in the company making the acquisition has to go from managing finance activity in their company to actually also overseeing money matters at the company they’re acquiring and then trying to remodel the whole financial setup so that they can consolidate the results.
Very often the two businesses will have different ways of presenting their accounts, so they’ve also got to oversee the creation of new ways of looking at their accounts and then train people to do it that way.
On top of that, it usually falls to the finance team to supervise or measure the realisation of the synergies and benefits of the integration and the cost of the project. So it’s a massive increase in the workload for finance, which inevitably requires people to backfill the people allocated to the integration.
There are also significant opportunities for IT specialists at both ends of the professional interim spectrum.
Integrations will always need expert ‘doers’ – people who can bring their specialist skills to bear to consolidate different systems – but the real opportunities tend to be for interim Chief Information Officers.
Many organisations have an IT department that is very capable of managing systems in ‘steady state’ but they often struggle, from a strategic point of view, to manage the process of deciding which systems should be adopted, how they migrate from system A to system B or how they will look after the legacy data.
Experienced CIOs are an essential requirement when a business has to simultaneously oversee the development of a forward-looking IT strategy while at the same time running old servers containing historic financial, product and customer data – potentially for many years after a deal has gone through.
Finally, any transformation, be it a merger, an acquisition or a move to a new operating model, presents a number opportunities for HR interims.
Managing the transactional elements of HR such as recruiting, training and paying often occupy the lion’s share of the internal team’s time. That leaves a big hole to fill on the cultural side in terms of redefining roles, responsibilities, vision and values.
No-one should ever underestimate the amount of work that needs to go into embedding the people side of business as usual after the major upheaval of a merger or an acquisition.
With some expert sources are already beginning to predict the onset of another downturn, the landscape for interims looks set to change again in the years to come.
But for now, particularly in the areas where there will always be a direct functional need, the future looks very promising indeed.