M&A with impact
Republished September 2019 (originally 2017)
Acquisitions can significantly accelerate top line growth and often make the headlines, but the failure rate of M&A is extremely high – measured in net financial value creation. Extensive studies and research show failure rates for M&A deals ranging from 50%1 and up to as high as 90%2.
In our own 2016 pan-Nordic M&A survey, respondents from across the Nordic M&A community – including business development, line management and private equity – rate only 62% of their own deals as successful. However, studies also show that companies that are actively engaged in M&A, i.e. frequent acquirers, on average over a multi-year period outperform inactive M&A companies, i.e. companies that do not make any deals, in terms of total shareholder return results generation3.
This begs the question: What is it that the most successful acquirers do to achieve success?
Our guide is meant as a practical reference handbook on how to increase the likelihood of M&A success for business executives who may not already have significant M&A experience. In this introduction, we share tools, methods and insights that are tried and tested and have proven to increase the likelihood of M&A success over time. It is not our ambition to provide an exhaustive guide to how to manage all M&A situations, but focus is on the following three themes:
Chapter 1: Successful M&A strategies – outlining five M&A strategy considerations that have proven to increase the likelihood of successful M&A across industries over time.
Chapter 2: Due diligence success factors – focused on practical tips and tools, including due diligence for commercial, operational, supply chain, IT as well as leadership and team.
Chapter 3: Success factors for post-deal impact – outlining key considerations for impact post deal, which synergies have the highest success rates and the key to realising these synergies.
We share findings based on our experience from working on a large number of pre-deal and post-deal situations, our latest 2016 pan-Nordic M&A survey and the recent M&A with Impact event in Stockholm where +40 senior M&A professionals shared their insights, tools and experience with how to improve the odds of M&A success.
1 Sher, Robert (19 March 2012). Why Half of All M&A Deals Fail, and What You Can Do About It. Forbes
2 Christensen, Clayton M., Alton, Richard, Rising, Curtis & Waldeck, Andrew (March 2011). The Big Idea: The New M&A Playbook. Harvard Business Review
3 Harding, David & Rovit, Sam (2004). Mastering the Merger: Four Critical Decisions That Make or Break the Deal. Harvard Business Press
Successful M&A Strategies
Article in Danish: A study of parameters for high-performing organisations.
Implement Consulting Group