The Friedman (3'd man) 3D model for M&A analysis
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The Friedman (3'd man) 3D model for M&A analysis

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The Friedman (3'd man) 3D model for M&A analysis includes the various threats that lead to M&A failure, and a 3D model that allows you to control for them...

The Friedman (3'd man) 3D model for M&A analysis includes the various threats that lead to M&A failure, and a 3D model that allows you to control for them...

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The Friedman (3'd man) 3D model for M&A analysis The Friedman (3'd man) 3D model for M&A analysis Presentation Transcript

  • 3 ’D-man model For analysis of M&A Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 1
  • 1. Model logic My research and experience have shown that there are a few distinct threats that lead to M&A failure. By taking them into account, you can better manage a transaction, better analyze a deal or better plan M&A execution… Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 2
  • 2. Strategic & Organizational Fit Strategic fit is focused on the compatibility between the strategies of the target firm and the acquirer. Organizational fit refers to the compatibility between the target and parent administrative practices, cultural practices, and personnel characteristics. Taken together, these two aspects of fit directly affect how the firms can be integrated as they reflect the corporate match between the parties. Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 3 View slide
  • 3. Human bias Strategic Decisions are made by human beings, and as such, are subject to human predisposition, prejudice and bias. Lack of (acquisition) experience Over-commitment to acquire (Delusional) optimism Overconfidence Greed Stupidity Entrenchment Executive confirmation bias Managerialism Empire building Managerial hubris Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 4 View slide
  • 4. Faulty decision-making processes are dependent on circumstances, proper process planning etc. • Faulty target selection (looking at only one potential firm…) • Lack of agreement on acquisition goals • Lack of planning and lack of effective process execution • Incorrect risk perceptions and propensities • Poor valuation and analysis decisions Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 5
  • 5. Faulty integration processes Even if all actions and decisions taken are correct and logical, ineffective post-acquisition integration will negatively influence performance . Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 6
  • 6. Financial aspects Wrong price or wrong mode of payment (cash / equity) have been shown to be potential sources of acquisition failure. Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 7
  • 7. Model utilization Cell: +972-54-4536568 | Fax: +972-9-7417607 | Email: yair@friedman.org.il 8
  • Find more presentations and information on my website: www.friedman.org.il Copyright 2014 @ Yair Friedman. All Rights Reserved 9