Appoint a leader
The acquisition process is detailed and time-consuming, so the responsibility can’t be left to fall on just anyone’s shoulders.
Because it’s a natural undertaking for LaLonde’s strengths, he put himself in charge of the process.
He says when it comes to any priority, it’s not as much about balancing it with other duties but about setting expectations. Whether you as the CEO or one of your employees will take charge of acquisitions, if you outline a time commitment along with your strategy, you’re likely to be more successful.
“It’s going to take a significant commitment,” LaLonde says. “Delegate it to someone who can handle that. It can be a big undertaking. A lot of cash and a lot of capital can be potentially disrupted to your organization as you work to integrate it. Be very realistic and be clear in your criteria that this is going to be a corner of my time for the next year — really lay that out.”
If you’ve decided to give the responsibility to someone within your organization, make sure you choose wisely.
“If they don’t have prior M&A experience, don’t give it to them,” LaLonde says. “There’s so much at risk that you have to really trust the person. That’s why I like one of your stars, someone you can really (trust), you have confidence in their ability to stick to the strategy you’ve outlined and bring you the right deal.”
Part of the intrigue in picking the right person is that he or she doesn’t have to come with a specific job title. But the person must have certain characteristics. You need a good communicator — someone who can regularly give you feedback and discuss prospects, opportunities and competitors. Others are fortitude and thick skin.
“Obviously you’re going to be rejected,” LaLonde says. “The whole point is to be rejected. You have to really push for it.”
LaLonde recalls being turned down the first time he went after RxHope, a Triplefin patient assistance and reimbursement services company. He sat down in the former owner’s office and the gentleman just stood up and left. Five minutes later, LaLonde was escorted out
and left feeling dejected as he took a cab back to the airport. He later found the owner was in the middle of a falling out with the intermediary who got him the appointment.
LaLonde e-mailed the owner two years later to see if they could meet again. Nine months after that appointment, RxHope was a Triplefin company.
It also may help to look at your strategy when picking the right leader.
“It could be someone who has particular subject matter expertise in a field so the targets will naturally want to talk to him or her,” LaLonde says. “Then you can augment that person with maybe a good lawyer or a good accountant.”
Keep in mind this person will be the face of your company, and reputation is everything, especially when you’re first getting started in acquisitions.
“Ultimately, though, reputations build, so the success, I think, down the road can be nicely and exponentially a benefit from getting (the right) person in this role,” he says.
