People usually love the idea of standardizing their M&A playbook and building an “M&A machine” or an “acquisition factory.” However, the immediate follow-up questions are: How much you can really standardize the M&A process? Does it depend on whether I do many smaller deals or a large mega deal? Smaller deals typically follow a more standard … Read more
1. Accounting Standards During the M&A due diligence process, it often becomes apparent that the Target has failed to comply with at least some accounting standards (for various reasons). Typical examples include the Target recognizing income on a cash basis (rather than an accruals basis) or recognizing revenue incorrectly (this is more likely if the Target has … Read more
As our article Enterprise Value Versus Equity Value – Determining The Final Value In Transactions outlines, the final price paid for the “Equity Value” of a company is often substantially different from the headline price or “Enterprise Value” initially agreed between the parties of a deal at the point the LOI is signed. The fundamentals behind Equity … Read more
An effective post-merger integration (PMI) process is critical to maximizing the potential value of a deal. While for many organizations hard facts relating to revenue and costs may lie at the heart of the PMI process, the less tangible human side of M&A can be equally as important. Indeed, in today’s era of M&A, intangible assets (people, … Read more
For companies looking to buy/sell, the deal value often forms the crux of negotiations. It is often a point of great contention, with the headline number of a deal value causing confusion amongst acquirers and sellers alike. The deal value will be outlined in the Letter of Intent (LOI) and will typically be made on the basis … Read more
As our recent article demonstrated an M&A strategy can help a company to expand, acquire new knowledge or technology, move into new geographical markets, or vastly increase output via one transaction. However, these benefits and opportunities often come at a significant cost to both the acquirer and target. A typical M&A deal will involve lawyers, accountants/corporate finance … Read more
There are two main ways for a company to grow. One is via increasing sales and the general size of a company’s operations over time – a strategy often referred to as “organic” or “internal growth.” The other is via acquiring another company or a number of companies (it is also possible for a company … Read more
As an acquisitive company, it’s important to have the right resources to support your pipeline process. Having a robust tool implemented can help your team: Below are the 5 things your team needs to construct a winning acquisition pipeline: 1. Inactive Deal Archiving When a deal dies or becomes inactive, it’s important to keep the … Read more
Your integration framework is in place. Functional leads are fully armed, and at their battle stations. Ready… Set… DAY 1! As soon as the clock starts ticking, every second in a PMI project matters. As Kaija Katariina Erkkilä outlines in her article on PMI speed, “speed in M&A integration execution does bring value and it … Read more
Deal sourcing is fundamental to M&A activity and represents the first stage of any transaction. Put simply, it involves creating leads and managing relationships with intermediaries so as to bring about a deal. Approaches to deal sourcing vary between firms. Some companies engage investment banks or other advisors dedicated to deal sourcing, while others utilize … Read more