Mergers & Acquisitions

How to separate “winners” from the “losers”

We help you to complete successful acquisitions, mergers and equity investments. Given the high failure rate, it’s amazing that companies make acquisitions at all. Consider the facts: studies have repeatedly shown that about 60-70% ultimately fail. Yet, it’s difficult to attain world-class capabilities, results and market position with organic growth alone. So what do you do? How do you accomplish your goals, while keeping risks manageable?

Experience has shown that organic and external growth effectively combined accomplish the best results. Achieving consistent M&A success, though, is one of the most difficult challenges managers face. Many companies lack a systematic, reliable approach to making acquisitions. Over the years, we’ve seen many otherwise leading companies approach acquisitions unprepared and in a hit-or-miss manner, oftentimes resulting in lost opportunities or the completion of ill-structured, misconceived acquisitions.

How can managers overcome these risks? Certain skills, processes and experience are essential and can improve the chances that acquisitions will consistently succeed.

Key elements of an effective M&A process

M&A is not rocket science. And it does not require staffing an entire corporate M&A department. But it is hard, complex work that requires discipline, expertise and focus. At its core, a good M&A capability is built on seven interrelated activities:

• Crafting a M&A Strategy – must be an extension of your company’s growth strategy
• Identifying & Qualifying Attractive Targets – each with a clear investment thesis
• Developing Relationships & Opportunities -  increasing your influence & options
• Due Diligence & Valuation – asking the right questions to ensure that the deal will indeed create value
• Negotiating, Structuring & Executing Transactions – preparing a winning deal & knowing when to walk away
• Integrating Acquisitions – understanding how value is created, where to integrate & where to back off
• Building Internal Business Development Capabilities – being able to successfully manages the process

What INNOVAND can do:

INNOVAND helps you to develop effective M&A capabilities and complete successful deals. As key elements of the M&A process we work with companies to:

• Develop a robust M&A strategy in alignment with your business strategy
• Decide where to invest & where to divest
• Prioritize growth opportunities - organic, M&A, joint ventures & partnerships
• Develop an M&A program, including objectives, frequency, size & timing of deals
• Approach target company management, create interest and initiate a serious dialog
• Dig deep to uncover answers to critical questions during strategic due diligence
• Provide support during negotiations & deal structuring
• Assess realistic valuations including maximum bid, i.e. walk-away price
• Decide where to integrate- & where to back off, i.e. post-merger integration

Next steps

To learn more about our work in this area or discuss your situation, please contact us. Or to read about INNOVAND capabilities in other areas, click the appropriate service.