Colleen Pound International March 22, 2016 M&A presentation
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Discover how to capture deal value during corporate M&A transactions. This presentation was delivered on March 22, 2016 and includes key strategies to ensure success during the M&A process.
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Colleen Pound International March 22, 2016 M&A presentation
- 1. CAPTURING DEAL VALUE EXECUTIVE BRIEFING: ADVANCING SUCCESSFUL CORPORATE M&A TRANSACTIONS MARCH 22, 2016
- 2. OPENING Areas of focus: 2014 – Focus on Business Optimization 2015 – Focus on Risk, Decision Making and Analytics 2016 – Focus on Mergers and Acquisitions What’s YOUR focus?
- 3. M&A landscape in need of critical review It is essential that we maximize the deals we do Most acquisitions are seen as: • One time events – heroic efforts • No process or pattern – not repeatable • Something that needs to get finished so everyone can get back to business CONTEXT Improving the acquisition integration process is the most urgent and compelling challenge businesses face today
- 4. Acquisitions may look good on the surface, often disappointing in reality: • Absorption/consolidation or tuck in – highest success rates • 65-70% of the value in HIGH PERFORMING deals • Transformational deals average 25% success rate • 1/3 -1/2 of all deals fail due to cultural mismatches • Large % fail due to poor or insufficient communication CONTEXT We are leaving value on the table.
- 5. REASONS WHY DEALS FAIL - OVERVIEW Challenges to overcome • Deals are becoming more complex. • Value is still being left on the table. • Over-confidence. Under commitment. Pre- Acquisition Deal Screening Post-LOI Due Diligence Sign to Close speed to close speed to market speed of decision making Warranty Post-Close 100 day plans Post- Integration 100+ day plans Systems & Processes People & Organization
- 6. 1. Early integration planning • people, culture, change and communications • assess the culture and support people through the change process • STRATEGIZE AND PLAN 2.Focus on pull through deal value 3.Sustained commitment to integration over the long term 4.Focus on cultural integration 5.Dedicated external resources 6. Accelerated integration 7.Communication STRATEGIES TO AVOID DEAL FAILURE
- 7. PRE-ACQUISITION Start early • 50% say during deal screen or Post LOI • 42% say in Due diligence Strategy & Vision • Able to answer the tough questions • Clear organizational direction minimizes uncertainty • Develop an Integration strategy • Vision • Team • Leadership Roles & Responsibilities • Plan • Prioritize • Culture • Pull through value This is when we have the best ideas – before we become exhausted and it loses its appeal. These are the times for plans that focus on delivering maximum value.
- 8. BETWEEN DEAL SIGN & DEAL CLOSE Highest performing deals: • Move fast • Execute the fundamentals early • transaction leaders must be aware of all factors of the decision making process, and be accountable to pull that value through the long term process • THIS is where you set the course to deliver VALUE • Opportunity to advance leading practices, develop new culture, boost performance, redesign organizational structures and systems • Decisions during these compressed timelines have long term impacts Plan ahead about when and how to make decisions with long term impacts
- 9. POST-CLOSE: WARRANTY Stabilize the Organization Align Leadership Stakeholder Communication People working together Opportunity in Chaos 100 Day plans must include the whole organization along with dedicated resources and a sense of urgency. Communication remains critical: Clarity is key Process and Systems: Key development People and Organization: Time to cement culture and values Coaching for aligning leadership and making the changes stick – people fall into old habits
- 10. POST-CLOSE: OPERATIONS Casualties of poor follow through of integration process • 40% organizational structure and people • 56% systems and processes Overcome integration inertia: • Integration is a process not an event • Leverage what you have learned from the culture earlier on • Leadership is key • Track the synergies through financial planning process and the financial plan • Organizational re-structuring, team building, work practice/process development • Ensure sufficient budget at the outset for continuing to extract value
- 11. POST-CLOSE: OPERATIONS Operational goals are the toughest because they can only be achieved through a sustained commitment to integration completion over the long term • Opportunity for best vs. migration • Long term Executive involvement crucial to ensure employees understand goals Achieving full integration requires: • Commitment • Focus • Abiilty to deliver on synergies • Management of combined talent • Integration of systems Companies lose steam after 6-12 months.
- 12. RECAP + CLOSE 1. Start early – deal screening / LOI / due diligence 2. Stay focused on value drivers and how to pull them through 3. Strategize 4. Commit to long term 5. Set milestones when you aren’t tired 6. Use External resources 7. Communicate 8. Make Culture a priority 9. Go faster We can capture 30-50% more of the deal value - we can’t afford to leave that on the table