From The Complete Guide to Mergers and Acquisitions
Your company closed the deal over two years ago, but the combined organization is still not operating effectively as one company. Results are below forecast, customers and talent are defecting and shareholders are pressuring the Board. This should not be the case, right? You thought you covered all the bases this time, but things just aren’t working, and it’s up to you to get things back on track. What now???
A Research Report by Mercer
Despite knowing that corporate culture is important, organizations still struggle with how best to convert an appreciation for cultural differences into a definitive plan of action for successfully executing a transaction.
According to Mercer's research, the most successful transactions engage senior leaders early in the process, which ensures a clear understanding of cultural differences and identifies and prioritizes actions that will inform, influence, and accelerate the integration effort.
There is no doubt that the pursuit of certainty in M&A is on the rise. With the advent of new rules and regulations pressing boards and corporate leadership, M&A deals are not only better scrutinized from the outside, but are being more deeply assessed from the inside. In a recent article in WSJ CFO Journal, it was announced that only “2.1% of deals have been scuttled as of July 31 of this year”. That is way down from a peak of 3.3% for the same period in 2009 for announced transactions. Post-announcement withdrawals are down and the reason is the “rise of risk aversion by corpo
"Real Life" Success Stories, Best Practices & Case Studies
At our last workshop on The Art of M&A Integration, Mark Herndon, President of M&A Partners, shared an interesting story with us. This anecdote really resonated with me and bears repeating to this larger audience.
We talk a lot about various failure factors from a standpoint of helping executives recognize what to do and not do in the midst of a live and fast-moving deal. But not all failure factors are created equal, as they say. For my two cents, avoiding an epic failure during integration all begins with a clear understanding of what we like to call “Deal-type DNA,” or the fundamental code of what really drives value in a given transaction.
There’s an old saying in the M&A business, “Bad planning and execution will kill a good deal every time, but the best diligence and integration will never save a bad deal.” For valid reasons, there’s so much attention placed on failure factors in due diligence and integration that the role of deal strategy in overall M&A success or failure is easy to overlook. The reality is that there are just as many strategy-related failure factors.
It was a real joy to attend the recent Art of M&A Integration workshop in San Francisco, not from the eyes of a presenter, but from a participant’s viewpoint. As usual, I opened and closed the session, but this time I took the chance to really observe our great presenters and take in the unique combination of experience, talent and rich content the Council brings to training in the niche of M&A. In just three days the workshop attendees received the best information, tools, case studies and raw opinions one could hope to receive in a training environment.