Australia

Details

  • Service: Advisory, Transactions & Restructuring, Restructuring Services, Management Consulting, Strategy & Operations, Topics, Growth
  • Type: Business and industry issue
  • Date: 30/06/2014

Buy Right: a road map for successful acquisitions 

Mergers and Acquisitions (M&A) have long been used as a way to scale up operations and broaden portfolios, enter new markets, acquire new customers, obtain new resources, remove competitors and more.
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M&A transactions therefore have the potential to generate significant shareholder value for those who successfully complete them. Success, however, is not guaranteed and research of completed transactions regularly reveals that a large proportion of deals fail to deliver the value they promised.


This publication explores the drivers behind successful transactions, common pitfalls to avoid and provides a road map to help achieve successful M&A outcomes.

 

Key insights

  • For a deal to be successful it must be supported by a clear strategic rationale that demonstrates how the deal is going to generate value for the acquirer.
  • Identifying, qualifying and properly engaging acquisition targets is a combination of art and science.
  • A sub optimal financing structure can impact on management’s time in terms of dealing with financiers.
  • Almost half of cost synergies and performance improvements are paid in the purchase price and yet almost half of all acquirers are performing little synergy analysis prior to completion.
  • Due diligence should be targeted to prioritise the validation of the deal rationale and value creation assumptions.
  • Identifying key cultural differences early and planning to overcome them is a key deal success factor.
  • Be comfortable that you have a clear plan of how you will deliver the value post completion.
  • Management teams often fail to track the benefits that are delivered from a transaction effectively.
 

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Video – Buy Right: a road map for successful acquisitions

Greg Ellis
Hear from Greg Ellis, Director, Strategy, discuss the essential 8 steps of KPMG's Buy Right roadmap for a successful acquisitions strategy.

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