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Mergers & Acquisitions

mergers and acquisitions sliderSuccess at M&A deal making isn’t easy, yet many great companies were built on key M&A deals, and many deals are clear winners. Research has shown that companies with a history of strong deal making earn higher shareholder returns than those that do few deals or none at all. Consider GE, Cisco, and Johnson & Johnson, to name a few. Each of these companies has flourished through smart deal making.

As a result many companies continue to include M&A as part of their growth strategy and executive leaders find themselves in a classic catch-22. That is, nearly all studies conclude that only 3 in 10 M&A deals create meaningful value for the acquiring company. Worse yet, close to half of those deals actually destroy value.

How can acquirers overcome this conundrum? By employing specific tactics and behaviors that improve the odds that acquisitions will succeed. Our True Reckoning Associates have worked on M&A transactions with both corporate and financial institutions. We’ve been involved in all elements of the deal value chain, from screening through integration.

From our experience we’ve learned that adopting a structured approach to the acquisition process is vital to ensure success. The True Reckoning structured M&A approach includes:

  • Acquire Strategically – Acquisitions are tactical implementations of growth strategies. Successful deals play key strategic roles that are founded on the firm’s needs and form the basis of improving competitive advantage;
  • Establish an M&A team – Having a multi-disciplinary team in place from screening through integration is key. Make sure roles and responsibilities are clear and communications channels are well defined;
  • Focus on the big stuff – Focus on the few, big questions during due diligence work that tests the strategic value of the deal. Operational due diligence should only be started once the strategic impact of the deal is clearly understood;
  • Integrate Strategically – Prioritize getting at the key sources of value. Gain more by integrating less. Identify key strategic leverage points and required tactical resources for integration and ignore the rest;
  • Plan for the unexpected – Know what you can and cannot do. Prepare for things to go wrong, they will.

When stated so simply, this approach may seem somewhat obvious. Yet for some reason, this structure is often ignored once the “adrenaline” of the deal kicks in. And if it is, the cost can be enormous to shareholders and other stakeholders of the firms involved.

If you’re considering M&A as part of your strategy execution, either on the buy or sell side, our experience can help you close the deal that is right for your organization. We’ll help setup your M&A team, define the process and ensure all stakeholders are aligned and informed throughout the complete M&A process including post deal closing integration.