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.
- 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.