The way these deals will be transacted will be very different to what companies may have been used to in the past five years; the focus has shifted 180°. Virtually every target will have a 'hockey stick' forecast and working through radical cost reduction, unrelenting price pressures and defending aggressive procurement. Many companies will be navigating unchartered waters in their commercial strategies.
Companies embarking on the M&A trail must react to the different landscape by switching emphasis away from the past to focus on the future. This requires a clear understanding of how the business is faring today; its prospects as the market returns; progress on restructuring and, most importantly, the value that is achievable in three years time once the full benefit of synergies has been delivered.
Sellers should be prepared to help buyers form a view of the future with confidence. Our role is to focus our work on these areas, such as reducing diligence from 3 years historic to 3 months in the future. Giving opinions on both cost and revenue synergies of any combination also helps sellers and buyers feel more comfortable with the dynamics of future sales and pricing.
To make the most of the opportunities rapid change brings, companies accross all sectors need reliable advice from experienced professionals.
KPMG creates unique propositions while providing insight into the future challenges they may face. We are committed to exceeding the expectations of our clients and providing support as they grow.