When Accenture recently announced its acquisition of digital engineering company Objectivity, it brought to mind the importance of the term ‘objectivity’. In the world of Mergers and Acquisitions, the noun objectivity, i.e., meaning a lack of bias, judgment, or prejudice, is particularly relevant.

As in life, there is often an imbalance between emotional and objective responses. In the context of a business sale transaction this is pertinent, particularly during the ‘negotiation’ and ‘due diligence’ stages of a transaction.

Selling a business is a highly emotive process, particularly as, unsurprisingly, a vendor’s emotions are easily stirred if their business is criticised, or their business decisions are questioned.

On the other hand, acquirers are usually ‘serial offenders’ – highly experienced negotiators who have repeatedly purchased businesses and are therefore well-versed in the art of objectivity whereas, for most business owners, this is a ‘one-off’ experience fraught with demands for decision to be made and critical information provided – and all against a backdrop of pressure for agreements to be reached on subjects with which they might have limited familiarity or personal experience.

Objectivity in these situations is important because it doesn’t use personal motivation or reasoning to support a decision, but instead uses hard evidence and deploys factual reasoning. These decisions are therefore not made based on the influence of emotion, prejudice, or bias.

By taking a more objective approach when viewing a situation, there is more clarity, factual analysis, and usually more scope for reasoning – all of which can work together and lead to more effective problem solving.

This is one of the most important services an M&A adviser can bring to a transaction, and it starts from the point of engagement – from the research and marketing of a client’s business with Information Memoranda that provide unbiased evidence of a business. Such evidence can show trend patterns, business features, and evidential plans for future growth. All of this is collated and marketed by an impartial team who are dedicated to ensuring the best outcome for a client’s business.

By being objective, an M&A adviser can provide an unbiased opinion and a balanced assessment of the situation, redressing the balance between emotional and objective stances and thereby facilitating a more objective view of issues being raised.

To provide an example, consider this scenario. A transaction is in due diligence; both parties and their representatives have been involved in several stages and have spent many weeks populating data rooms with questions and answers.

This is a particularly dangerous stage of any transaction where emotions run high and both parties seem to be becoming increasingly tired of the process – something we often refer to as ‘deal fatigue’.

Despite both parties being committed to completing the deal, at this stage it can be easy for either party to feel that they have “had enough” – sometimes over the most trivial issue.

Keeping the deal alive is, arguably, where an experienced adviser delivers the most value. After all, a failed deal is bad for all parties!

In these circumstances, the most ‘sage advice’ a seasoned M&A adviser can give you is “to be calm” and “try to put yourself in the other person’s chair” – in an attempt to at least try and understand the situation from the other party’s perspective.

By cooling the situation down and providing an objective, perspective based on experience and relevant facts, it is possible to encourage both parties to reflect and work to finding an acceptable resolution.

Objectivity allows business owners, acquirers, and their advisers, opportunity to focus on the potential transaction as a development opportunity not only for the buyer but also for the business being sold.

To find out more about what’s involved in selling a business and how to begin your preparations, please join us for a free Business Owners Masterclass on 5^th October aboard HMS Belfast in London.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment. 

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment. 

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.