2024 was a year of transition for M&A, as reflected in the latest M&A Fee Guide from Firmex. Advisors were bracing for economic and regulatory changes following some decisive elections, and while 2025 brought about many changes, they were not all as predicted. Regulatory ease did not come as quickly as anticipated, and tariff increases further destabilized the market.
As M&A advisors have done during past moments of macroeconomic instability, they pivoted their strategies. As part of this adaptation, flexibility became a focal point, and creative deal structures gained popularity.
Strategic purchases and private-equity-backed transactions have taken center stage. In our Q4 2024 deal trends survey, advisors reported that private equity firms were the most common buyers they encountered. According to the 2025 Bain & Company mid-year report, strategic M&A purchases are up 11% from 2024, further demonstrating how dealmakers are responding to the complex market.
While tuck-in acquisitions are not new in the market, small strategic purchases are being seen from both private and public buyers as ways for companies to continue growing their businesses in challenging conditions.
The benefits of tuck-in acquisitions
There are a few key reasons why a tuck-in acquisition would be a strategic move for an organization:
- Expanding market presence
- Obtaining new technology or IP
- Access to expertise via talent acquisition
- Cost efficiency
- Revenue growth
For buyers, tuck-in acquisitions can expand their presence in the market or move into new sectors. Typically, this is done by acquiring new technology or talent that will assist with their growth.
For sellers, an acquisition can be the solution to limited growth prospects or the challenge of breaking into an already crowded market. This is common with startups, which may have a great product but lack the resources to properly bring it to market. If acquired by a platform company, the startup could gain access to opportunities and financing, saving it the time required for organic growth.
However, while there are benefits for both buyers and sellers with tuck-in acquisitions, there are a few risks associated with the transaction as well. Selling companies need to carefully consider the fact that they may lose their brand value after being acquired. For those without a strong brand, it’s not as critical a consideration, but regardless of the acquired company’s place in the market, it needs to complete its due diligence to ensure the acquiring company will be a good partner to them and respect the technology, talent, or product they offer.
Likewise, the parent or platform company must conduct extensive market research and due diligence to find the right companies to acquire, which will add value to their existing business.
It is clear that, for both parties involved in a tuck-in acquisition, proper due diligence is key to determining if the acquisition is the right decision for both businesses. When done correctly, it can lay the groundwork for a successful transaction from which both companies will benefit. But what does correct due diligence look like for the buyer and for the seller?
Pre-deal diligence
Having the right tool can ease the process and ensure that diligence is done correctly and successfully.
The challenge: Determining a good fit for your organization
When first considering a tuck-in acquisition, the platform company needs to firmly set its strategic goals and find a target company that aligns with those goals.
The solution: Thorough market research and diligence
Conducting thorough market research is the first step towards finding that perfect match. In some cases, it may also be beneficial to consult an advisor for professional advice. Once potential target companies have been identified, undergoing thorough due diligence is critical to assess the target company’s value and risks.
The challenge: Externally sharing large amounts of data
Sell-side companies need a professional way to present vast amounts of data, including financial documents that will be important for the buy-side’s assessment. For some companies, the amount of information can be vast and difficult to navigate.
The solution: Effective organization with a virtual data room
By using a virtual data room, companies have access to a purpose-built tool for due diligence. In a VDR, documents can be easily organized, protected with precise permissions, and shared externally on a professional platform.
Post-deal integration planning
Each M&A transaction type has its own unique challenges once the papers have been signed and the parties have moved on to post-deal integration. For a tuck-in acquisition, that integration involves folding the acquired company into all ongoing operations of the platform company, while ensuring those ongoing operations continue to run smoothly.
The challenge: Cultural integration
If not handled correctly, cultural misalignment can occur, which could result in employee turnover and decreased productivity. This is particularly important when considering key talent from the acquired company that needs to be preserved.
The solution: Addressing cultural differences early
Creating a strong vision for the company culture post-merger is important as early as possible in the process, as is involving key leadership in the integration. Clear communication to employees and efforts to blend the company cultures together through team-building activities are effective ways to welcome new employees into the platform company, mitigating potential turnover.
The challenge: Effective integration while keeping operations smooth
With so many things to consider, such as finances, culture, IT, IP, and more, the integration process can fall apart due to miscommunication and a lack of coordination. While such a complex process is ongoing, it’s also critical to still direct resources and attention to current operations.
The solution: Developing a clear post-merger integration plan
A post-merger integration plan should be built as early as possible in a tuck-in acquisition. This way, key stakeholders in the integration can be identified, responsibilities assigned, and all parties aligned on the integration goals. Using a templated checklist, such as the Firmex post-merger integration checklist, is an excellent way to stay on track.
Leveraging a purpose-built virtual data room for successful tuck-in acquisitions
From pre-deal diligence to post-deal integration, a tuck-in acquisition can be a complicated process that requires thoughtful organization and collaboration in order to be successful. Having the proper tools to support this process can help ensure that success.
A Firmex Virtual Data Room can help organize large volumes of documents and information for due diligence efficiently. As mentioned earlier, this is a critical stage for the sell-side company. Presenting its data in an organized, accessible manner on a professional platform will make it a more attractive target to buyers and make it easier for buyers to assess its assets. With robust security and precise permission settings, the sell-side company can retain full control over its IP without worrying about the wrong guest user seeing the wrong document.
Once interested buyers are present, a Firmex VDR will track all activity in the room, allowing the seller to see how long the buyers spent looking at which documents. If any questions arise, the Q&A feature streamlines all communication between the seller and the buyer. This is crucial for both parties, ensuring the buyer has all of their queries answered and the seller can share everything they need to.
A data room is built to be a collaborative space. Guests can easily be invited to view specific folders or documents in the room, and contributors can easily and securely upload documents with the Email In feature.
Once the deal is closed, a helpful tracker such as a post-merger integration checklist can be uploaded directly into a virtual data room for seamless collaboration and organization. Tracking progress in the data room will help keep stakeholders on task and avoid overlooking crucial steps.
With valuable features built to streamline processes without sacrificing security, and award-winning customer service available 24/7/365, a Firmex Virtual Data Room is the most effective tool for supporting companies through a tuck-in acquisition. A Firmex subscription provides access to an always-on data room that both acquisition parties can leverage for success. A seller can always be ready for potential buyers with a professional and intuitive platform, while a buyer can stay organized and on track from due diligence to post-deal integration.
To book a demo and see the support a Firmex Virtual Data Room can provide, click here.