50–90% of all Merger & Acquisition deals fail.1 The root cause is fairly simple: the M&A industry is focused on “getting deals done” and is not focused on value creation in deals. A majority of the time and expense are front-loaded into finding a company to acquire and executing the deal. Deal advisory and execution is only 30% of the [...]
M&A deals are normally run like football team without a coach. Each specialist has a particular skill set, but each specialist is not positioned to understand how his or her activities relate to the ultimate deal success (value creation). Companies need to take an integrated view of the entire deal cycle. For example, M&A strategy decisions should be informed by [...]
With M&A, most companies are focused on deal execution, and not enough time is spent on value creation. In fact, most companies aren’t optimized for creating value with M&A, which requires rethinking the approach to M&A. M&A is a 4-quarter sport. M&A strategy and advisory is the 1st quarter. Deal execution is the 2nd quarter. Integration is the 3rd quarter. [...]
Exit planning is essential to achieving maximum shareholder value and ensuring that all your hard work is rewarded. Without an effective plan, market forces or some unforeseen event could leave you scrambling to find an exit. If you sell under distress and without preparation, your valuation will be significantly less. Exit planning is like an insurance policy. You pay a [...]
Some M&A strategies involve more risk than others. The biggest risk factor is the disruptive change required in your core business. For example, if you are trying to consolidate an industry through multiple acquisitions, then significant risk exists in the integration process. On the other hand, the classic private equity “financial engineering” is less risky. While you are slashing costs, [...]
Choosing a buy-side M&A advisor requires deciding what skills and expertise you need to make your deal successful. Most M&A advisors focus on sourcing and structuring the deal, which is logical since most M&A advisors come from investment banking. However, if you want to make your deal successful, you should think about what other skills and expertise you need throughout [...]
Everyone has heard the statistic that over 50% of buy-side M&A deals fail to meet their stated objectives. The reason is fairly straightforward: the M&A industry is geared towards “getting deals done” and not making deals successful. Companies don’t engage in M&A simply to do a deal. Instead, the purpose of M&A is to achieve a corporate objective through which [...]
