Details

  • Service: Advisory, Transactions & Restructuring, Transaction Services
  • Type: KPMG information
  • Date: 7/1/2011

A New Dawn: Good Deals in Challenging Times 

The report discusses the results of the sixth global survey commissioned by KPMG to examine M&A deals throughout their life cycle - the way these deals were managed and the value they represented. The survey focuses on acquisitions completed between 2007-2009 - the final months of the M&A boom, the credit crunch and the subsequent global recession.
A New Dawn: Good Deals in Challenging Times
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The findings of the report highlight the following:
  • Even though economic times were challenging, there was an increase in the proportion of deals that created value - 31% of deals created value compared with 27% in the previous survey
  • Despite successful deals being done with a focus on growth rather than reducing costs, the major factor in determining price is still cost savings and performance improvement plans
  • ASPAC shows a binary chance of deals being a success with 40% of deals showing that they are destined for failure and 20% of deals showing neutral value
  • Despite impacts of cultural issues on the success of cross border deals there is still limited HR due diligence amongst acquirers with only 38% of respondents undertaking due diligence in this area
  • As the downturn emerged corporates became more cautious and were not willing to overpay for acquisitions, this resulted in an increase in the proportion of deals enhancing value, from 27% in 2005-06 to 31% in 2007-09
  • The number of Private Equity houses who are admitting failure has trebled to over 30%.