Mergers & Acquisitions
Professionals in Mergers & Acquisitions generally agree that 50-75% of all deals never provide the benefits they promised when they were originally presented, or take too long to produce them. In addition Management generally feels that only 40% are successful. KPMG confirms that 80% of all mergers fail because of Cultural issues. This is why we focus on Cultural Due Diligence during the post merger integration process.
Failures in M&A are traceable to:
- Growth targets for growth sake
- “Ego” gets in the way of rationale
- Insufficient homework
- Incomplete due diligence
- Unrelated diversification
- The most common reason: Poor integration and “business as usual”
At Paul Bergé International we believe that mergers have the greatest chance of being successful if:
- The strategy is based on filling gaps through acquisitions.
- Dedicated teams are created to manage well-tuned Integration processes.
- All the facts are on the table.
- Plans are developed for people retention.
- There is a shared vision between acquirer and target.
- Short-term wins for acquired employees can be demonstrated.
- Long-term wins for all are planned for and produced.
- There are similarities in chemistry and culture.
- Integration plans are implemented rapidly so as to restore stability ASAP.
- One doesn’t try to please everyone.
We are specialists in managing the M&A process from start to finish. Our main focus is on post-merger integration as this is the area that is most often ignored or where the acquirer does not want to rock the boat.
When working with a client we start by jointly defining the M&A drivers:
- Access to new Geographies
- Increase the Customer base
- Access to new Technologies, Products, Processes, IP and Skills
- Diversification of Product / Service offering
- Cash flow
We then develop Goals for Successful M&A. This is then followed by the following detailed steps keeping in mind that we are not a law firm nor an accounting firm but M&A specialists:
- Get understanding of the industry and market place
- Get participation and buy-in from critical employees
- Define success factors and metrics
- Align M&A strategy with corporate strategy
- Define communications needs
- Evaluate target selection criteria
- Define potential targets and how they fit the strategy
- Approach short-listed targets
- Select the ideal target
- Apply criteria and valuation methods
- Reach agreement in principle with target through submission of Letter of Intent (LOI)
- Provide Guidance for and support of the Due Diligence process
- Manage Outsourced due diligence activities
- Review Due Diligence Progress Reporting on Regular Basis
- Create Integration Team if different from due diligence team (generally not recommended)
- Activate the integration teams:
- First day plan
- Execute communication plans
- Corporate registrations
- Monitor integration activities and progress
- Take corrective actions where required
- Conflict Resolution
- Corporate culture
- Evaluate feedback
- Manage transitions:
- Customer Service
- Service providers
- Operations and programs
- IT, email addresses, networks and systems
- Corporate identity on stationary, buildings, uniforms, vehicles, marketing materials
- Measure success and take corrective action:
- Adjust M&A strategies if required
- Transfer experience to next project
- Organize regular employee meetings for feedback
Call us to see how we can help your organization.