Chairman's Message
By Jim Jeffries, Chairman, M&A Leadership Council
As it is with M&A Integration, effective due diligence is both a science and an art form in today’s challenging business climate. The science of M&A due diligence has created a substantial body of knowledge around the practices of financial due diligence (income statements, balance sheets, working capital ...
One in five U.S. and UK organizations that participated in the Willis Towers Watson 2017 Cyber Risk Surveys reported that their organizations have suffered a cyber breach in the last year with 6% of those incidents having been significant, consistent with publicized recent large cyber breaches. Two thirds of U.S. companies, and just under half of UK businesses, see cybersecurity as a fundamental challenge to their organization as reflected in the priority given to cybersecurity.
Everyone is talking about how A.I. is taking over knowledge-based work and rendering professionals like lawyers or even M&A experts redundant. What everyone seems to be forgetting is the evolution of manufacturing work required - from project to line production - to revolutionize productivity and ultimately enable robots to take over some tasks from humans.
As the recent WannaCry and Petya cyber-attacks have demonstrated, cyber risk continues to pose a significant threat to organizations across the globe. Cybersecurity is a critical business function, yet, paradoxically, cyber risk is often insufficiently examined – or even overlooked – during the merger and acquisition (M&A) due diligence process. This often results in the acquiring company unwittingly assuming risk and placing assets in jeopardy.
We routinely hear horror stories about good deals being fumbled badly when handing off between due diligence and integration. Think this is a rookie mistake that your organization would never make during the big game? If so, you need some extra laps after practice.
"There is a lack of accountability for the success of the overall acquisition beyond close.”
Pardon me while I point out the elephant in the room. Providing adequate integration project staffing is a challenge whose time has come.
Following up on last week’s post, Do You Need a Merger Repair, you’ve done a Merger Repair Rapid Assessment, and determined that your most recent M&A integration efforts just didn’t get the job done. Now what?
Your company closed the deal over two years ago but the combined organization is still not operating as one company – results are lagging, customers and key talent are defecting, and shareholders are pressuring the Board.
This should not be the case – right? Management thought they had checked off all of the right deal actions: