An acquisition isn’t a quick fix. You want it to fit into your thesis like a puzzle piece and align with your long-term vision.

Mergers and acquisitions (M&A) can be a powerful growth tool, but only when approached with focus and discipline. Short-term financial wins can be tempting, but the real challenge is ensuring every acquisition strengthens your long-term strategy.

Through organic growth and eleven add-on acquisitions over six years, our business has expanded nationally and is among the leading non-bank merchant acquirers in the U.S. But this growth isn’t attributed to chasing every opportunity. It’s about selecting the right ones that support and fit one’s business thesis.

Each year, we may evaluate roughly thirty-five potential acquisitions, but typically, we only move forward with one or two using a structured, intentional process. Throughout that process, we ask:

  • Is this a strategic fit?
  • Is this a financial fit?
  • Is this an operational fit?
  • Is this a cultural fit?

Rather than treating M&A as a roll-up strategy, you should see it as assembling the right puzzle pieces according to where you see your business in five years. Every acquisition should reinforce—not redefine—your identity. If it doesn’t check the right boxes, it’s out.

We suggest using an opportunity filter framework to help guide your decisions and ensure each deal moves you closer to your long-term vision. Below, we’ll break down the six tenets in our framework that help drive our approach to strategic acquisitions.

6 tenets for evaluating strategic M&A opportunities

1. Strategic Story Fit

As CEO, there will always be challenges on your plate, but approaching an acquisition as a solution to an immediate problem is a costly mistake. An acquisition is not a short-term fix. It can be a tool for long-term success, and it should fill a meaningful gap within your company and fit into your broader vision.

M&A can be a valuable tool for helping to accelerate growth, but it can’t consist of simply rolling an acquisition into your company to create short-term efficiencies. When reviewing potential acquisitions, your first priority should be evaluating them against your strategic thesis. If the acquisition allows you to achieve your thesis more efficiently, then continue to evaluate it. If not, pass on the opportunity, no matter how beneficial it may be in the short term.

Questions to ask yourself:

  • “In what ways does the company fit into your thesis criteria?”
  • “In what areas would you need to compromise and are you willing to do so?”
  • “What does the transaction add to your strategic story?”
  • “In what ways does it open new opportunities for value creation possibilities?”

…Even the most complex problems are solvable when cultural alignment exists between the buyer and seller.

After the overall strategic fit, cultural alignment is one of the most important factors in your evaluation. We’ve learned that even the most complex problems are solvable when cultural alignment exists between the buyer and seller. Conversely, simple issues become insurmountable without it.

Consider the compatibility between leadership styles, approaches to team management, problem-solving strategies, and customer relationships. Misalignment in these areas can lead to friction that may jeopardize the partnership.

Questions to ask the potential acquisition:

  • “How do you lead your team? Are you a fear-based or a love-based leader?”
  • “How do you handle conversations when someone isn’t performing well?”
  • “Where do you see your business and our industry going?”
  • “How do you treat your/our partners, including customers and other stakeholders?”

3. Risk Profile

In our business, risk is inherent, and no deal is without uncertainties. The key to mitigating these risks is developing detailed, actionable plans that identify and help manage them.

At our company, we thoroughly assess and develop mitigation plans for every type of risk the M&A process could expose us to, including market, financial, strategic, legal and operational risks.

Questions to consider:

  • “Are there practices within the business that could lead to financial or reputational losses or tax liabilities?”
  • “Are there operational inefficiencies or progress gaps that may hinder integration or scalability?”
  • “Is there the potential for key market risks, such as a shift in customer demand, competitive threats or new entrants?”
  • “Are there regulatory or compliance changes on the horizon that could hamper growth or increase operating costs?”
Factors such as total headcount and how companies compare in terms of payroll can have a big impact on team performance and cohesion post-acquisition.

4. Financial Potential

Every M&A process includes a financial analysis and preliminary valuation along with financial diligence that includes a tax assessment and quality-of-earnings report. We undertake these activities, but also look closely at the potential for long-term, sustainable growth possibilities.

The lure of immediate gains, such as short-term revenue spikes from price increases or one-time product releases may be tempting, but it is challenging to sustain that level of growth long term.

When you evaluate a potential transaction, you need to see that the financial benefits align with strong, long-term growth potential, particularly where our operational shared services and channel/distribution expertise can create added value.

Questions to consider:

  • “What are the prospect’s financial targets?”
  • “What are their key value drivers?”
  • “Are there synergies in terms of generating revenue and managing costs?”

5. Operational Fit

The relationship between accretive growth and the operational friction of integration is crucial. Operating platforms, CRM systems, hosting platforms and development languages can significantly impact integration complexity. Evaluating operational synergies – including cost savings and revenue growth opportunities – are essential to a transaction’s success.

The same is true when it comes to integrating people. Factors such as total headcount and how companies compare in terms of payroll can have a big impact on team performance and cohesion post-acquisition.

Questions to consider:

  • “What degree of transformation is required to align people, processes, platforms and systems?”
  • “What scope, scale and pace of change is required to support the timeline for value capture?”

Develop a detailed 30 / 60 / 90 / 365-day integration plan during diligence, which provides clear alignment and expectations for all parties…

6. Post-Acquisition Plan

Post-acquisition planning can be a key differentiator, and one that has been integral in helping you create smoother transitions, deeper cultural alignment, a shared vision and a strong, collaborative team. Here are some recommended processes:

Vision casting. From the initial conversation, work to create a mutual vision of the future with sellers and stakeholders. Begin strategizing your integration approach during the initial introductions, adopting an open and honest approach to minimize surprises for sellers. The transparency from the beginning of the process helps ensure they understand the most appealing aspects of the thesis, challenges we foresee, and the impact that the acquisition will have on long-term growth potential.

Talent retention. Retaining strong team members is a priority. Make concerted efforts to help ensure key talent and leadership from the acquired company feel valued and integrated into your ecosystem so that you can preserve continuity and benefit from their expertise.

Integration planning. Develop a detailed 30/60/90/365-day integration plan during diligence, which provides clear alignment and expectations for all parties, and execute on that plan meticulously, typically achieving full integration—including infrastructure, processing platforms, organizational structures, and branding—within 12 months.

Here’s the bottom line.

An acquisition isn’t a quick fix. You want it to fit into your thesis like a puzzle piece and align with your long-term vision. Considerations such as the cultural, financial, strategic, and operational fit – as well as assessing your ability to energize and help grow the business and developing a thorough post-acquisition plan – can help to help ensure each opportunity reinforces your company’s strategic thesis and five-year plan, rather than diverting it.