The M&A Integrator For Streamlining Value Creation
"Everyday worldwide there are 30 M&A deals happening led by companies as well as private equity firms.
There is never a happy ending in many marriages – whether it’s between two people or two companies. Mergers and acquisitions (M&As) though still work great for many other business as they fuel inorganic growth from point A to B but Dharmendra Singh, part of global M&A team of energy management giant Schneider Electric, noticed that pattern of love lost between two businesses over integration process. So he turned into the relationship manager for every acquirer to smoothen out the integration with the acquiree company for everlasting courtship through his software-as-a-service platform for deal discovery, due diligence and post M&A integration – MergerWare.
Singh launched MergerWare in October 2015. He was already 42 by then, late by at least 12 years when most technology startups today are launched by under-30 geeks. But he doesn’t have an iota of qualm on his face instead he backs it with a pretty strong reason. “The product and the market which I am into, I don’t think a 30-year old guy can do this. It requires at least 10 years of understanding of M&As particularly large deals.”
Singh had financial back-up for following two years to bet on his idea. So either he had to invest his savings to bootstrap MergerWare or seek investment from outside. He had already discussed about the idea with his colleagues at Schneider Electric before he left the company. And he got lucky to find a backer among them without preparing investment pitches. Philippe Bouchet, former Vice President at Schneider Electric has now backed MergerWare twice, investing around $100,000 in April this year.
“Bouchet was the first person to fund me. I told him I don’t have money, whatever I have is a back up for two years. So he gave me $100,000,” remembers Singh. MergerWare changed its name from Intgrea Partners in October 2016 after Singh started getting flooded with at least 50 investment pitches from entrepreneurs globally every week since it used last name as partners. “People always misunderstood us a VC firm,” says Singh. Ware in MergerWare signifies it is a software platform. It sell minimum of 10 licenses for $250 per user and per month basis, and goes up to 500 licenses, renewed annually. Also, it partners with M&A advisory firms to offer solution for deployment of their consulting services.
“Everyday worldwide there are 30 M&A deals happening led by companies as well as private equity firms. At Schneider Electric, I noticed that there was no value creation for businesses from acquisitions in terms of growth,” claims Singh. This does not happen because of multiple factors including the strategic intent for the deal, people involved, their vision etc.
Streamlining Value Creation
Globally M&A teams are lean having just four-five people and often members don’t have required experience in working on large M&A deals. As a result they miss out on critical checks and lose information required. Also since M&A integration cycle is quite long, at least six months to up to two years, the team members often changes which mean that critical information also keep changing hands and gets lost in the process. More than that, having all the information in one place remains the biggest challenge for large companies which have multiple offices and so information is also distributed.
Through MergerWare, businesses that don’t even have an M&A team, can use the platform for all the checks and balances. “We have automated that process and the information is secured in the encrypted form to avoid any compromise,” claims Singh. Besides that, if the business wants to see how much synergy has been achieved post deal over the time, it can simply log in and check.
“There is transparency and it saves time as you know what’s happening on real time basis and corrective action can be taken,” he asserts. MergerWare currently has six customers globally and will dedicate the new funding towards global expansion. The customer on-board will be slow for the company as it targets deals worth $100 million and above.
(This article was first published in the May issue of Entrepreneur Magazine. To subscribe, click here)