Rules of success of a serial acquirer
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Eight rules of success for a serial acquirer. Analyze and adapt your capability maturity to integrate successfully Structure and tailor integration approach and M&A process Avoid deals from hell Manage complexity and effort Drive for failure, then for success in due diligence Blueprint
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Rules of success of a serial acquirer
- 1. RULES OF SUCCESS OF A SERIAL ACQUIRER http://www.mergerduediligence.com © Dr. Karl Popp 2014
- 2. M&A leads are • PROFESSIONAL, • RELAXED, • SUCCESSFUL. Doesn´t resonate with you? Let´s see what we can do about it… © Dr. Karl Popp 2014
- 3. Rule 1: Look in the mirror – not the rear view mirror • What? – Analyze and adapt your capability maturity to integrate successfully • Why? – Buyer company and manager abilities to integrate are mission critical • How do we manage it? – Select integration managers carefully – Secure enough capacity for integration work © Dr. Karl Popp 2014
- 4. Capability maturity problems © Dr. Karl Popp 2014 M&A experience Dedicated M&A resources People in corporate functions to care for acquisition integration }M&A experience gap Resource gaps
- 5. Rule 2: Shake and bake approach for acquisitions • What? – Structure and tailor the integration approach in due diligence • Why? – It is hard to drive a car while you are building it • How do we manage it? – Make use of predefined work catalogues, integration and management approaches, but tailor them to the specific case © Dr. Karl Popp 2014
- 6. Rule 3: Minimize process risk • What? – A structured due diligence and integration process is mission critical • Why? – You don´t have time to discuss process during integration • How do we manage it? – Define processes based on work catalogues © Dr. Karl Popp 2014
- 7. Rule 4: Let others go through hell for you • What? – WYSIATI what you see is all there is – you don´t foresee what you don´t know • Why? – Avoid disaster • How do we manage it? – Read the book „Deals from hell“ by Robert F. Bruner © Dr. Karl Popp 2014
- 8. Rule 5: Appreciate the work. Don´t underestimate it. • What? – Complexity and effort of merger integrations are often ignored or guessed to be too low • Why? – Complexity models are not used • How do we manage it? – Leverage complexity models, see next slide © Dr. Karl Popp 2014
- 9. Complexity and Effort of integrations Cultural changes Reduc-tion of sites Workforce reduction © Dr. Karl Popp 2014 1 2 3 4 5 6 7 8 11 10 9 12 Revenue Buyer Revenue Target Buyer Employees Target Employees Operating countries Locations Companies Value Chain Coverage Profit increase Source: Prof. Lucks, Siemens Structural complexity
- 10. Rule 6: Fail early in due diligence • What? – There is nothing worse than a bad deal. • Why? – Dramatic cost of fixing things late in the process – Failure is no fun • How do we manage it? – Let failure in due diligence be a viable option – Drive for failure in DD, then for success © Dr. Karl Popp 2014
- 11. Rule 7: Maximize the likelihood for success • What? – Define and plan for success • Why? – Reasons and prerequisites as well as the way to success is mission critical • How do we manage it? – Name and monitor success factors – Let everybody know the way to success © Dr. Karl Popp 2014
- 12. Rule 8: Make your day. Blueprint! • What? – On day one you need to execute the integration plan. • Why? – Flawless execution is key. • How do we manage it? – Define a detailed integration plan, together with the target. Before closing! © Dr. Karl Popp 2014
- 13. Results: Ingredients for success • Analyze and adapt your capability maturity to integrate successfully • Structure and tailor integration approach and M&A process • Avoid deals from hell • Manage complexity and effort • Drive for failure, then for success in due diligence • Blueprint http://www.mergerduediligence.com © Dr. Karl Popp 2014
- 14. Please find more information here: http://www.mergerduediligence.com © Dr. Karl Popp 2014 http://www.drkarlpopp.com