ma-playbook

Original source / Raw SKILL.md

---
name: "ma-playbook"
description: "M&A strategy for acquiring companies or being acquired. Due diligence, valuation, integration, and deal structure. Use when evaluating acquisitions, preparing for acquisition, M&A due diligence, integration planning, or deal negotiation."
license: MIT
metadata:
  version: 1.0.0
  author: Alireza Rezvani
  category: c-level
  domain: ma-strategy
  updated: 2026-03-05
---

# M&A Playbook

Frameworks for both sides of M&A: acquiring companies and being acquired.

## Keywords
M&A, mergers and acquisitions, due diligence, acquisition, acqui-hire, integration, deal structure, valuation, LOI, term sheet, earnout

## Quick Start

**Acquiring:** Start with strategic rationale → target screening → due diligence → valuation → negotiation → integration.

**Being Acquired:** Start with readiness assessment → data room prep → advisor selection → negotiation → transition.

## When You're Acquiring

### Strategic Rationale (answer before anything else)
- **Buy vs Build:** Can you build this faster/cheaper? If yes, don't acquire.
- **Acqui-hire vs Product vs Market:** What are you really buying? Talent? Technology? Customers?
- **Integration complexity:** How hard is it to merge this into your company?

### Due Diligence Checklist
| Domain | Key Questions | Red Flags |
|--------|--------------|-----------|
| Financial | Revenue quality, customer concentration, burn rate | >30% revenue from 1 customer |
| Technical | Code quality, tech debt, architecture fit | Monolith with no tests |
| Legal | IP ownership, pending litigation, contracts | Key IP owned by individuals |
| People | Key person risk, culture fit, retention risk | Founders have no lockup/earnout |
| Market | Market position, competitive threats | Declining market share |
| Customers | Churn rate, NPS, contract terms | High churn, short contracts |

### Valuation Approaches
- **Revenue multiple:** Industry-dependent (2-15x ARR for SaaS)
- **Comparable transactions:** What similar companies sold for
- **DCF:** For profitable companies only (most startups: use multiples)
- **Acqui-hire:** $1-3M per engineer in hot markets

### Integration Frameworks
See `references/integration-playbook.md` for the 100-day integration plan.

## When You're Being Acquired

### Readiness Signals
- Inbound interest from strategic buyers
- Market consolidation happening around you
- Fundraising becomes harder than operating
- Founder ready for a transition

### Preparation (6-12 months before)
1. Clean up financials (audited if possible)
2. Document all IP and contracts
3. Reduce customer concentration
4. Lock up key employees
5. Build the data room
6. Engage an M&A advisor

### Negotiation Points
| Term | What to Watch | Your Leverage |
|------|--------------|---------------|
| Valuation | Earnout traps (unreachable targets) | Multiple competing offers |
| Earnout | Milestone definitions, measurement period | Cash-heavy vs earnout-heavy split |
| Lockup | Duration, conditions | Your replaceability |
| Rep & warranties | Scope of liability | Escrow vs indemnification cap |
| Employee retention | Who gets offers, at what terms | Key person dependencies |

## Red Flags (Both Sides)

- No clear strategic rationale beyond "it's a good deal"
- Culture clash visible during due diligence and ignored
- Key people not locked in before close
- Integration plan doesn't exist or is "we'll figure it out"
- Valuation based on projections, not actuals

## Integration with C-Suite Roles

| Role | Contribution to M&A |
|------|-------------------|
| CEO | Strategic rationale, negotiation lead |
| CFO | Valuation, deal structure, financing |
| CTO | Technical due diligence, integration architecture |
| CHRO | People due diligence, retention planning |
| COO | Integration execution, process merge |
| CPO | Product roadmap impact, customer overlap |

## Resources
- `references/integration-playbook.md` — 100-day post-acquisition integration plan
- `references/due-diligence-checklist.md` — comprehensive DD checklist by domain


---

## Referenced Files

> The following files are referenced in this skill and included for context.

### references/integration-playbook.md

```markdown
# Post-Acquisition Integration Playbook

The 100-day plan for integrating an acquisition. Most acquisitions fail not because of bad deals but bad integration.

## The Integration Paradox

Move too fast → you break what you bought.
Move too slow → talent leaves, customers churn, value evaporates.

**The rule:** Decide on day 1 what stays separate and what merges. Then execute without wavering.

## Pre-Close (Day -30 to 0)

### Integration Lead
- Appoint ONE integration lead (not a committee)
- This person reports to the CEO, has authority over all workstreams
- Full-time role for 100 days minimum

### Planning
| Workstream | Owner | Day 1 Decisions |
|-----------|-------|-----------------|
| People | CHRO | Who stays, comp alignment, reporting lines |
| Technology | CTO | Systems to merge, timeline, migration order |
| Customers | CRO | Communication plan, account ownership |
| Product | CPO | Roadmap integration, feature consolidation |
| Operations | COO | Process alignment, tool consolidation |
| Finance | CFO | Entity structure, billing, reporting |
| Legal | External | Contract assignments, IP transfer |

### Communication Plan (ready before close)
- Employee announcement (both companies) — Day 1
- Customer notification — Day 1-3
- Partner/vendor notification — Week 1
- Public announcement — per deal terms

## Week 1 (Days 1-7): Stabilize

**Goal:** No one leaves, no customer churns, operations continue.

- [ ] All-hands meeting (both companies together)
- [ ] 1:1 with every acquired leader (within 48 hours)
- [ ] Retention packages confirmed for key employees
- [ ] Customer communication sent (personal for top 20 accounts)
- [ ] Systems access provisioned (email, Slack, tools)
- [ ] Integration FAQ published internally

### The First All-Hands
What people want to hear:
1. Why this happened (honest version)
2. What changes (be specific, not vague)
3. What doesn't change (equally important)
4. Their job security (be direct)
5. Timeline for decisions

What NOT to say: "Nothing will change." (It will. They know it.)

## Month 1 (Days 1-30): Orient

**Goal:** Teams know each other, quick wins shipped, blockers identified.

### People
- [ ] Org chart finalized and communicated
- [ ] Comp band alignment completed
- [ ] Benefits transition timeline published
- [ ] Cross-team introductions facilitated (not forced)
- [ ] Culture assessment: what's different, what's compatible

### Technology
- [ ] Architecture assessment complete
- [ ] Migration priority ranked (quick wins first)
- [ ] Shared development environment established
- [ ] Code access and permissions set up
- [ ] Technical debt from both sides documented

### Customers
- [ ] Top 20 accounts contacted personally by leadership
- [ ] Unified support channel established (or plan for it)
- [ ] Pricing/contract transition plan for overlapping customers
- [ ] Product roadmap communication (what's coming, what's being deprecated)

### Quick Wins
Ship something visible in the first 30 days. A feature that combines both companies' strengths. This proves the acquisition works better than any memo.

## Month 2-3 (Days 31-100): Integrate

**Goal:** Core systems merged, one team operating, value creation visible.

### Systems Integration Priority
1. **Communication** (Slack, email) — Week 2
2. **Identity** (SSO, accounts) — Week 3
3. **Development** (repos, CI/CD) — Month 1
4. **Data** (analytics, CRM) — Month 2
5. **Product** (shared platform) — Month 2-3
6. **Finance** (billing, reporting) — Month 3

### Culture Integration
- **Don't:** Force the acquired team to adopt everything immediately
- **Do:** Find the best practices from BOTH cultures, adopt the winner
- **Don't:** Rename everything on Day 1
- **Do:** Co-create the combined identity over 60 days
- **Watch for:** "Us vs them" language, meeting exclusions, information hoarding

### Measuring Integration Success
| Metric | Target | Frequency |
|--------|--------|-----------|
| Employee retention (key people) | > 90% at 100 days | Weekly |
| Customer retention | > 95% at 100 days | Monthly |
| Cross-team collaboration (PRs, meetings) | Increasing trend | Weekly |
| Synergy revenue (combined offerings) | First deal within 60 days | Monthly |
| Integration milestones hit | > 80% on time | Weekly |

## Post-100 Days

Integration isn't "done" at 100 days. But the foundation should be solid.

### Ongoing
- Quarterly integration retrospective (what's working, what isn't)
- Culture health check at 6 months
- Full financial integration assessment at 12 months
- Earnout milestone tracking (if applicable)

### Common Failure Modes
| Failure | Root Cause | Prevention |
|---------|-----------|------------|
| Key talent leaves at month 4 | Retention cliff, culture mismatch | Longer earnout, culture attention |
| Customer churn spike at month 6 | Product changes without warning | Over-communicate product roadmap |
| "Two companies in a trenchcoat" | Incomplete integration | Force cross-functional projects |
| Value never materializes | Wrong acquisition rationale | Kill the deal if rationale was wrong |
| Acquirer culture overwhelms | "Our way is the only way" | Adopt best of both explicitly |

## The Kill Switch

Sometimes acquisitions don't work. Signs it's failing:
- Key people leaving despite retention packages
- Customers churning above baseline
- Integration milestones consistently missed
- Culture clash worsening, not improving
- Revenue synergies aren't materializing at month 6

**Options:**
1. Double down with new integration lead and plan
2. Operate as semi-autonomous unit (less integration)
3. Spin off or divest (expensive, but sometimes necessary)

Admitting failure early costs less than dragging it out.

```

### references/due-diligence-checklist.md

```markdown
# M&A Due Diligence Checklist

Comprehensive due diligence organized by domain. Not every item applies to every deal — focus on what matters for YOUR acquisition rationale.

## Financial Due Diligence

### Revenue Quality
- [ ] Revenue by customer (top 10 customer concentration)
- [ ] Revenue by product line
- [ ] Revenue by geography
- [ ] MRR/ARR trend (24 months minimum)
- [ ] Churn rate (gross and net, by cohort)
- [ ] Revenue recognition policies
- [ ] Deferred revenue / backlog
- [ ] One-time vs recurring revenue split
- [ ] Professional services vs product revenue

### Profitability
- [ ] Gross margin by product line
- [ ] Operating expenses breakdown
- [ ] Burn rate trend (improving or worsening?)
- [ ] Path to profitability (realistic or aspirational?)
- [ ] Unit economics (LTV, CAC, payback by channel)

### Cash & Liabilities
- [ ] Cash position and burn rate
- [ ] Outstanding debt (terms, covenants)
- [ ] Accounts receivable aging
- [ ] Accounts payable
- [ ] Pending or contingent liabilities
- [ ] Tax obligations (any back taxes?)
- [ ] Cap table (fully diluted, option pool)

### Financial Controls
- [ ] Audit history (audited vs reviewed vs compiled)
- [ ] Financial reporting cadence and quality
- [ ] Budget vs actual variance history
- [ ] Key financial policies

## Technical Due Diligence

### Architecture
- [ ] Architecture diagrams (current state)
- [ ] Technology stack inventory
- [ ] Infrastructure (cloud provider, regions, costs)
- [ ] Scalability assessment (current capacity vs load)
- [ ] Security architecture (encryption, access controls)

### Code Quality
- [ ] Test coverage (unit, integration, e2e)
- [ ] CI/CD pipeline maturity
- [ ] Technical debt inventory (estimated remediation cost)
- [ ] Code review practices
- [ ] Documentation quality

### Data
- [ ] Data architecture and storage
- [ ] Data privacy compliance (GDPR, CCPA)
- [ ] Data portability (can you migrate it?)
- [ ] Proprietary data assets (training data, user data)
- [ ] Data retention policies

### Operational
- [ ] Uptime history (SLA compliance)
- [ ] Incident history (frequency, severity, resolution time)
- [ ] Monitoring and alerting coverage
- [ ] Disaster recovery plan and testing history
- [ ] On-call rotation and processes

## Legal Due Diligence

### Intellectual Property
- [ ] Patents (granted and pending)
- [ ] Trademarks
- [ ] Copyright registrations
- [ ] IP assignment agreements (all employees/contractors)
- [ ] Open source usage and compliance
- [ ] Trade secrets protection measures

### Contracts
- [ ] Customer contracts (terms, renewals, termination rights)
- [ ] Vendor contracts (key dependencies, terms)
- [ ] Partnership agreements
- [ ] Lease agreements
- [ ] Employment agreements (non-competes, IP clauses)

### Compliance & Litigation
- [ ] Pending or threatened litigation
- [ ] Regulatory compliance status
- [ ] Government investigations
- [ ] Insurance coverage
- [ ] Prior legal disputes and resolutions

## People Due Diligence

### Team Composition
- [ ] Org chart with roles and tenure
- [ ] Key person dependencies (bus factor)
- [ ] Compensation details (salary, equity, bonuses)
- [ ] Employment agreements and non-competes
- [ ] Contractor vs employee classification

### Culture & Retention
- [ ] Recent engagement survey results
- [ ] Turnover rate (last 12-24 months)
- [ ] Glassdoor/reputation assessment
- [ ] Management quality assessment
- [ ] Culture compatibility analysis

### HR Compliance
- [ ] Employee handbook and policies
- [ ] HR complaints or investigations
- [ ] Benefits programs
- [ ] Equity plan details and administration

## Market Due Diligence

### Market Position
- [ ] Market size (TAM, SAM, SOM) with sources
- [ ] Market share estimate
- [ ] Growth rate (market and company)
- [ ] Competitive landscape (direct and indirect)
- [ ] Barriers to entry / competitive moat

### Customer Analysis
- [ ] Customer segmentation
- [ ] Win/loss analysis (why customers chose them)
- [ ] NPS or satisfaction scores
- [ ] Customer acquisition channels
- [ ] Customer lifetime and expansion patterns

## Red Flag Severity Guide

| Severity | Examples | Action |
|----------|---------|--------|
| **Deal killer** | IP not properly assigned, undisclosed litigation, fraud | Walk away |
| **Major renegotiation** | Customer concentration >40%, key person risk, technical debt >6 months | Reduce price or add protections |
| **Integration risk** | Culture mismatch, legacy systems, manual processes | Budget for remediation |
| **Monitor** | High churn, declining NPS, aging tech stack | Track post-close |

## Due Diligence Timeline

| Phase | Duration | Focus |
|-------|----------|-------|
| Preliminary | 1-2 weeks | Public info, financials, high-level tech |
| Deep dive | 4-6 weeks | All domains, interviews, code review |
| Confirmation | 1-2 weeks | Verify claims, resolve open questions |
| Final | 1 week | Legal review, final terms negotiation |

```