M&A Blog and News
(This article appeared in Financier Worldwide and has been edited to comply with their editorial guidelines, which include UK spelling and grammar, and specific house styles for consistency.)
To be successful in acquisitions and integrations, we strongly recommend that organisations focus on some key numbers.
The first number to focus on is ‘70’, as in the Rule of 70/70.
"Real Life" Success Stories, Best Practices & Case Studies
Companies are rethinking what should get done during due diligence and who should do it. In the past it was too often viewed as a discrete function separate from integration and best left to the financial, legal and other specialists to evaluate the target business on a stand-alone basis. Their focus was on addressing such issues as: Are assets overstated or liabilities understated? What is the proper valuation for the target company? How do we want to structure the deal from a tax and legal perspective?
CEOs and their boards have always had a primary responsibility to compete for shareholder investment in the market. In order to do so, they must focus on driving up the intrinsic value (discounted cash flows) of the company to create demand for the stock. In simple terms, Intrinsic value is created from both ROIC (returns on invested capital) and Revenue Growth. Empirical evidence from both the stock market and cash flow analysis show that ROIC combined with Revenue Growth drive the intrinsic value and in turn the stock price. Stock prices, like all prices, are driven by demand. The hi
Companies, their customers, and their stakeholders cannot and will not tolerate an integration time frame of more than 12 months, period. If you can’t integrate in 12 months or less, forget it! Many companies consistently operate in the intuitive mode of “don’t rock the boat”, “let’s take our time with this and give the organization time to adjust,” “let’s get
Sleep to Succeed…..What? That’s right, the evidence is in and all of us “Type A’s” or wannabees need to get at least one more hour of sleep each night to improve our effectiveness over time. I know what you’re thinking -- “how can a person in M&A who is expected to put in 18-hour days running around with their hair on fire supposed to take sleep seriously?” After all, we have come to worship the overachiever… not the sleeper.
by Mark Herndon, President of M&A Partners
Are You Getting Better at M&A?