Ep. 161: Omar Choucair - M&A Operations

Contact Omar Choucair:
https://www.linkedin.com/in/omar-choucair-cpa-80264815/


FULL EPISODE TRANSCRIPT
Mitch: (00:05)
Welcome back to Count Me In, IMA's podcast about all things
affecting the accounting and finance world. This is your host
Mitch Roshong, and I'm pleased to introduce you to Omar Choucair.
Omar is the CFO at Tritech a world class financial operations and
insights company committed to transforming financial processes to
best in class levels of efficiency and effectiveness. Omar is a
senior level financial executive with broad experience in
corporate finance, accounting, corporate governance, and FP&A
management skills. Here, in episode 161 of our series, he talks
about why and how corporate M&A operations are falling short
and where he sees the trends going in the future. Keep listening
as we head over to the conversation now.
 
Adam: (00:57)
Omar, thanks so much for joining us today, and we're gonna jump
right into things in Bain's global M&A 2021 report, they
state that M&A is expected to spur 45% of revenue growth over
the next three years. Up from 30% over the last three years, one
of the first lines of the report says as the world locked down
and masked up M&A endured, do you agree with their
sentiment?
 
Omar: (01:23)
Yes. Wholeheartedly. And, thanks for taking the time it's, you
know, the last 18 months have been quite overwhelming in terms
of, the things that have happened to, you know, public companies
and private companies. And, you know, to the extent that,
somebody would said back in, the February, March timeframe of
2020, what was about to happen? I think a lot of people wouldn't
have believed it, but yes, it's, it's been astounding.
 
Adam: (01:50)
Definitely. I think everybody's just their minds have blown
what's happening. but what's great is that business seems to be
booming or not really booming, but increasing, which I think is
one of the things that with everything locking down, we're still
moving forward, which is great.
 
Omar: (02:07)
Yeah. It's if you go back and think about just how many companies
have grappled with, employees working remotely and the technology
and the processes and the procedures that all these companies had
to deal with early on in the pandemic. And to think that whether
it was, you know, strategics, large strategic public companies,
private equity, venture capital that this M&A engine
continued, and not only continued, but accelerated all the way
through the end of 20. And then, continuing through the first,
you know, 10 months of 2021 is absolutely stunning.
 
Adam: (02:48)
So even with this positive outlook that we've been talking about,
many corporate M&A operations seem to be falling short still,
can we focus a little bit on why and how this continues to
occur?
 
Omar: (03:01)
Sure. I would say a couple of things. So first of all the large
strategics, you know, they had the capital. So I don't think
there was an issue with respect to capital. I think they had cash
on the balance sheet. They had plentiful access to, you know, to
public debt, private debt, et cetera. I think what could have
happened was that these large strategics had a process and a
control procedure about how to do M&A, it was like very
programmatic. And I think what could have happened was when
everybody went and started working from home and the remote side,
that a lot of that programmatic process, it wasn't hardened for
people working from home. And that's my personal belief. And I
think additionally, to the extent that those companies, those
large strategics had, built in technology, whether it was on the
FP&A side on the financial close side, just in terms of, you
know, R&D, those companies that were really hardened and
connected on the IT side, I think they did extremely well versus
their counterparts that maybe had not invested in technology. And
they saw this like, gap between what they thought they could do
and what they actually could do. And just the, the astounding
pace at what's, the M&A, you know, market continued. It
really, it probably put a lot of pressure and squeeze on some of
those companies.
 
Adam: (04:28)
Do you think that there was a bit of a change management gap as
well for those companies that were not kind of up to par?
 
Omar: (04:36)
I think the, the change management is always difficult. And if
you kind of, you know, zoom out a little bit in terms of change
management and just the integration, I know the first hundred
days are just, it's almost like it's the, it's all the due
diligence, you know, up until the time that there's an M&A
deal that gets signed. And there's a whole process around that.
And I think we can talk about that in a little bit, but in terms
of the first hundred days after, those first hundred days after
are critical in terms of culture, in terms of what did companies
buy, did they buy technology? Did they buy, did they make
customer list? Like, what is it, what was the strategic asset
that they bought? And I think that's really important.
 
Adam: (05:16)
Do you think that first hundred days is even harder when you have
a remote workforce?
 
Omar: (05:21)
I think the first hundred days are significantly harder when you
have a remote workforce. And the reason is because there's two
cultures that have to get fused. It's the it's, you have to prep
the buyer's culture, right. In terms of now we have this
additional responsibility. And a lot of times, you know, the C
level and the board, they're all super excited about, you know,
doing the M&A, but then it's the mid-level management.
Everybody else go, wait a minute, I've got all this additional
work I have to do. Right. So, sometimes there's a gap between the
board and senior management and what, you know, the people that
actually are doing some of the work. So I think there's that. And
then I think also to the extent that, you know, the systems and
the process and technology are not really running at optimum
level, when you bring on an additional, you know, set of revenue
streams, and HR and people and technology, it can be a very
stressful period. And then if all those people are working at
home and they don't have that culture. Yeah. It's a lot of work.
And I think, you know, for the CEO, CFO, et cetera, there's a lot
of gut checks that have to be made all along, all along the
way.
 
Adam: (06:36)
All right. So we've been talking a little bit about the, how and
the why and how it affects the people, but can we focus now just
what's some steps that we can take to overcome these challenges
and the things we've been discussing.
 
Omar: (06:49)
Right. I would say it's really in two pieces. So the large public
companies, you know, they have obviously the large public
companies versus, you know, private, you know, PE-backed
companies, if you will, it's a different ballgame, right? So
those public companies, they have, you know, legal obligations to
have programmatic controls and processes, et cetera in place. So,
so any company that's a public company. And then we can talk
about the SPAC and little bit, they they've had to jump into that
public company real quickly, but to the extent that they have
controls and procedures, it's a little bit easier for them to
solve the gaps because they have a roadmap and they have certain
monthly and quarterly controls that have to get done. And they're
very well documented. They're very well tested. They have third
parties that are testing them all the time. So the gap is a
little bit easier for public companies because I think they know
what to do. I think the real question then is for the management
is how do they get folks th...