In a lot of ways, Kip Clarke says, dealmaking is like a game of poker.

“There’s a lot of gamesmanship involved, and the skilled buyer or seller appreciates how that game plays out,” says Clarke, president of KeyBank’s Midwest region and Cleveland market.

Clarke has been advising buyers and sellers across multiple industry sectors for the last 35 years, closing more than 250 M&A transactions valued at more than $15 billion. He joined Key in 1994 through its acquisition of his firm, and he later built and co-led Key’s M&A group.

Sharing lessons from decades of dealmaking experience, Clarke spoke with Smart Business Dealmakersabout his strategies for mastering the game.

What are your keys to a successful acquisition?

Strategize. Any good acquisition has to be consistent with a broader corporate strategy. Underlying the strategy, there needs to be a series of assumptions. Within those assumptions, there needs to be a thesis around a deal: Why is this so important to us? People get drawn to the numbers, but if they have a thesis that the market is moving in a certain direction and this acquisition will position them better for it, then that’s a rudder that can keep them centered during the process.

Plan. Any plan relies on a series of assumptions. As soon as one of the assumptions changes, you need to see if the plan should change. Let’s say your assumption was that you were in an exclusive negotiation and you had strong bargaining power because there was no other more logical buyer. But then you learn that another credible buyer has emerged. That would require a different game plan: Do you need to start moving a little faster, or change the structure of the deal to offer more upside? How much are you really willing to pay?

The risk is that sometimes people fall in love with a deal, but they don’t have a game plan and they haven’t listed out their assumptions. Then they get whipped into a frenzy and the bidding goes up and the next thing you know, they’ve overpaid and they’re not sure how they got there. It’s important to have these assumptions dictate how much time and energy you spend.

Prioritize. Don’t chew up a lot of time and seller angst around items that are seldom issues. There are typically one or two big assumptions underlying the strategy and execution; you’ve got to see through the haze of many numbers, decks and advisers to stay focused on what’s most important.

Let’s say you’ve identified that customers and culture are most important. What you need to focus on in the early part of the due diligence is metrics related to customers and culture. Stage those early in the process instead of saying, ‘Here’s a due diligence request that’s 25 pages long.’ Sometimes buyers get so wrapped up in wanting to be thorough that they don’t prioritize what’s most important, and then they want to negotiate around every single point — which can really destroy goodwill. Many times, deals fall apart because folks get too tied into the minutiae, but if you get the big things right, you’re good.

What’s the most import M&A lesson you’ve learned?

Pulling together a successful deal is both a science and an art. It requires knowledge of industry and market subtleties, the ability to analyze a multitude of complex factors and a deep understanding of the other party.

Deals are all about information asymmetry. The seller knows everything — the good, the bad, the ugly — and the buyer’s job is to get to the point where they know as much as they possibly can, and hopefully everything, by the time it closes. The reason why things don’t go well is because there are things that buyers didn’t look at until they got to the close.

For example, there may be a seller that is thinking about selling because they’re nervous that the internet is going to fundamentally change their business. That’s probably not a risk that they’re going to openly talk about to a buyer, so there’s natural asymmetry. You’re not necessarily going to tell everybody about every scrape on a car you’re selling.

There are motivations and sensitivities on both sides. Pay attention to the signals — it is a poker game.

If dealmaking is a poker game, what are the tells to watch for?

Let’s say you’re visiting a management team, and they’re giving a presentation on their business. You can tell how carefully scripted and rehearsed it is by paying attention. If the material is flawlessly put together, you can tell they’ve been through this a number of times and there doesn’t seem to be an emotional connection, the signal is: ‘Maybe we’re not in an exclusive process here. We need to be careful about how much time and money we put into this.’

Alternatively, you meet with folks and have a great dialogue, they’re very engaged, they’re pulling material together informally. It’s not highly rehearsed or scripted. The signal is: ‘Maybe this is not being shopped broadly; maybe this is an opportunity to get something at less than full market price.’ But the risk is also: ‘Maybe these guys haven’t really taken a look inside their own closet for skeletons.’

Read the tea leaves: How engaged are they with you? What questions are they asking? How easy is it to get information? The whole process is a tapestry, and there’s all sorts of interesting poker elements. That’s why a big best practice is to make sure you get the principals face-to-face as much as you can, because the more intermediaries you have in the way, the more the signals can get confusing and the poker game gets complicated.

How to reach: KeyBank,