News
M&A Trends for 2013
EY in their M&A Tracker recently stated “Focused, strategic deals will continue to be in vogue in 2013. However, the subdued sense of urgency and risk adverse approach to M&A means completing transactions will continue to pose challenges for management.” Read more
Deal Making in the downturn
With the current economic climate driving a dramatic reduction in corporate spending will M&A continue in 2009? The answer is clearly yes – albeit at a much lower level than recently experienced. M&A is a natural corporate phenomenon and happens in good times as well as in bad. Companies that consistently get M&A right have spent the time and resources to document their M&A processes, train their people and capture the learning from past acquisitions. Read more
Source: Acquisition Solutions, M&A Magazine, Feb 2009
E&Y: Companies to invest in internal controls
Big Four firm's survey shows that businesses see benefits in spending on internal controls. Three-quarters of the world's largest organisations are preparing to invest in internal controls, a survey by Ernst & Young has found.
In a poll of 140 companies in 17 countries, mainly SEC registrants, E&Y found that many CFOs and heads of internal audit still believed that some internal controls were ineffective.
The biggest ‘blind spots' were controls over expansion into international markets, post-acquisition integration, and real estate and construction projects.
'There is now widespread recognition that effective internal control directly impacts business performance in a number of areas,' enthused Adrian Godfrey, of Ernst & Young’s risk advisory services.
Source: Nicholas Neveling, Accountancy Age, 30 Apr 2007
Nine out of 10 M&As fail to deliver
Management Issues 26 March 2007
An analysis of more than 200 major European M&As over the past three years by consultancy Hay Group has found that senior business leaders believe just 9 per cent were "completely successful" in achieving their stated objectives. This plummeted to an alarming 3 per cent of mergers and acquisitions by British companies, said Hay. Read more
Deutsche moves on cross-border M&A
FT 1 March 2007
Deutsche Bank has promoted two of its most senior bankers to the position of co-head of global mergers and acquisitions as the investment bank moves to take advantage of the growing importance of cross-border M&A. Tony Burgess, currently head of M&A in Europe, and James Stynes, head of M&A in the Americas, are to take on the new positions. The move is designed to allow the two men to concentrate on cultivating new clients. They are expected to focus particularly on emerging markets, which are producing a growing number of acquisitive multinationals.
Deal complexity increases with cross-border acquisitions. Does your company really have the tools it needs to deliver the value from these deals?
Pressure to deliver deal synergy benefits to increase in 07
KPMG Feb 2007
Following a recent KPMG survey of 270 European mid market corporate and private equity Steve Halbert, head of mid-markets in KPMG’s corporate finance practice said: "Private equity houses are now factoring in lower exit multiples for acquisition targets – a sign the private equity community is concerned about pricing levels. That said, whilst strong appetite remains, the pressure cooker of competitive situations should not be underestimated." With competition for doing deals and potential lower exit multiples the margin for error on delivering synergy benefits will continue to reduce.
Source: http://www.thomsonmergernews.com/story.asp?storycode=226683
Merger and Acquisition Integration
Accenture 16 June 2006
"The most successful deals are approached with a comprehensive integration plan, with core team continuity through most of the transaction life cycle, from target identification, valuation, due diligence, deal execution, pre close planning, and post-closing integration."
In a survey of more than 400 U.S. and European published by Accenture, corporate executives found that only 45 per cent believed that their most recent deals achieved expected cost-saving synergies and only 51 per cent achieved expected revenue synergies.
Failed Acquisition Example Source
The Morning After, Driving for post deal success
KPMG Jan 2006
The key findings of this global survey show companies need to do more to control their M&A Process;
- More deals enhanced value than reduced value despite increased competition in the M&A market
- There was a strong correlation between companies that enhanced value and those that met or exceeded their synergy and performance improvement targets
- Nearly two thirds of acquirers failed to realize their synergy target, however on average 43 percent of the synergy target was included in the purchase price
- Companies found they did not start post-deal planning early enough
- Although a difference in organizational culture was the second biggest post deal challenge, 80 percent of companies were not well prepared to handle this
- It took on average nine months for companies to feel they had control of the significant issues facing the business post deal
Applied Mergers and Acquisitions
- Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigor in the development of their M&A deals
Contact us for a live demonstration of how the M&A Process model works or to discuss how we can help your company in it's Post Merger Integration activities.
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