Skip Navigation LinksM&A integration & carve-out consultants

Exceptional M&A Performance

M&A Performance Gun v01.jpg

A specific combination of psychological traits found in the behavioural corporate finance literature, may illuminate why acquirers undertake value destroying mergers and acquisitions. These include hubris, overconfidence  and excessive optimism, which can significantly contribute to the underestimation of the risks inherent in acquisitions, overvaluation of the target and an excessive deal premium.  Numerous studies have further shown that acquirers exhibiting these psychological traits are also blinded by the belief that they are able to distinguish between "Russian roulette" gambling, i.e. critical risks are not surfaced and managed, and controlled risk-taking.

Even in those acquisitions where the right target has been acquired for the right price and deal thesis, highly skilful integration is  fundamental to realising transaction value and requires combined capabilities of strategy, transformation, technology and change management to steer the complexity of M&A transactions. Business & IT Integration.jpg   A key question therefore is how well does your company consistently find, confirm and deliver that value, deal after deal? Recent surveys suggest that approximately   fifty percent of mergers fail to deliver their intended value when looking at stock price performance two years after integration.

Numerous studies analysing integration program delays have identified a number of common causes. These include the delayed roll-out of an enterprise governance model, which is often attributed to a lack of a program management office to take charge of the integration efforts. Other inhibitors include a lack of resources that can focus both on operations and transformation initiatives, multiple vendor procurement cycles, and ineffective vendor integration. Additionally, slow decision-making processes and insufficient communication between business and technology leaders can result in the early demise of an integration schedule.

What is required for post transaction success?

Post-merger integration and restructuring programmes are highly complex undertakings and require a broad spectrum of specialist skills, experience, methods & tools. MandA Complexity.jpg

In our experience we have found that:

  • If you want to be a serial acquirer it is recommended that companies build their own M&A integration capability and methodology, alternatively use consultants with established expertise in M&A and proven tools;
  • A clear understanding of what the deal strategy is leveraging, whether just the target resource or the entire business model;
  • Alignment between deal strategy and integration is key and founded in realistic estimates of cost savings and revenue enhancements;
  • Transformational objectives are clearly defined and achievable;
  • Having the right approach to an acquisition or divestiture restructuring, that is holistic and covers all the necessary disciplines. This is  critical to enabling major change and without impacting business as usual;
  • The restructuring approach must be supported by people with the right skills and capacity;
  • The planning process needs to commence prior to closure and allow for resourcing challenges to be resolved;
  • Understanding the complexity of completing the transaction is a critical success factor and the first step in identifying forecast capability and capacity issues.

Intelligently analysing your organisation’s ability to complete M&A transactions

For business leaders, the answer to these questions depends on many factors, where some of these factors are transaction related and some are organisation related:

Transaction-specific factors:

  • Deal Strategy & transaction type;
  • Size of the transaction;
  • Nature of the transaction (friendly or hostile);
  • Global transaction footprint;
  • Degree of required carve-out (if applicable);
  • Desired level of integration;
  • Complexity of IT-related integration issues;
  • Size, complexity and timing of synergy requirements;
  • Synergy between the acquirer and target;
  • Similarities between the acquirer and target
    • IT application footprints
    • IT infrastructure
    • IT delivery models;
  • Existence of outsourcing contracts;
  • Anticipated duration of the transaction close window (announcement to regulatory approval to close);
  • Level of pre-deal preparations and due-diligence;
  • Volume and complexity of Day One business and IT requirements;
  • Volume and complexity of IT-related integration projects.

Organisation-specific factors:

  • Degree of governance centrality;
  • Level of organisational change agility;
  • Culture polarisation/synergy;
  • Complexity of each organisation’s operations;
  • Maturity and complexity of each organisation’s IT landscape;
  • Competitive position of each organisati
  • Number of available experienced M&A resources within each organization;
  • on;
  • Volume and complexity of existing non-transaction related IT activities and projects (acquirer and target).
  • Level of M&A experience (acquirer and target);

Knowing this critical information can help you intelligently analyse your IT organisation’s ability to complete M&A transactions without outside M&A IT support — i.e., your ability to sink or swim.

Helping You To Succeed

It is not uncommon to see M&A exposing gaps in your resource profile and teams. These can vary from top-level executive functional or change directors through to project or programme management support. Dettica's capability service provides a unique combination of interim, consulting and coaching in whatever combination you require to make your deal work. We will deploy the best candidate or team to help you achieve your objectives, including leveraging as needed from our extensive network. Whatever the requirements, Dettica can provide suitably qualified people who have the drive, energy and experience in the M&A field, can adapt quickly to differing client environments, and have a proven track record of delivering results.

We can provide a range of pre-screened candidates from a broad cross-section of industry sectors. These individuals can demonstrably strengthen management teams with expertise in a wide range of specialist areas including: finance, IT,  business modelling, change & programme management, communications & Stakeholder Management, but all with deep and very successful M&A programme delivery experience.

M&A Integration Management Office

An enterprise program management office that includes both business and technology leadership capabilities is of enormous benefit in driving companies through complicated M&A programmes.

Integration Perspectives.jpg

In particular, this service provides integrated business and technological solutions, the controlled and aligned implementation of business change and the common approach, tools, techniques and best practices needed to enable rapid and complex programme delivery. Additionally, organisations must be able to seamlessly orchestrate the work of various service providers and internal organisations, and deliver measurable business value. Resourcing the enterprise programme office is therefore pivotal in determining the overall success of the programme. This should not be resourced with M&A novices, however strong their otherwise skillset.

Why Dettica ?

High Performance Team V6.jpg

Our consultants are all highly experienced M&A specialists with top-tier consulting backgrounds. We fully appreciate that not all clients have the budget or time to engage a large team of consultants for extended periods and that often more flexible and adaptable solutions are required.

We also understand that clients want high performance, highly motivated and supportive consultants whose drive for programme success is relentless and can quickly adapt to the clients culture and processes.

We have recently provided the leadership, governance and solution delivery for a $3bn cross-border divestiture, a $0.7bn cross-border acquisition and the become the first choice team and trusted M&A partner for many of our clients. The reasons for this are quite simple in that we:

  • Specialise purely in M&A;
  • Always deploy the best team;
  • Land with the wheels spinning and add maximum delivery focus;
  • Have a high performance team, established through continuously working together on multiple transactions;
  • We are trusted by our international clients having proven our delivery capability;
  • We provide a more affordable alternative to the major traditional consultancies, thus better preserving net deal value;
  • We will look beyond the value that justified the transaction, opening the aperture to find new sources of synergies and value;
  • We have frequently gone beyond our remit in supporting our clients and on numerous occasions "saved the day";

Proven methodology and proprietary assets

In addition to a comprehensive view on divestitures and acquisitions from deal and integration strategy  to operational execution, we have proprietary assets including field-tested tools, templates and thought leadership.

Post Transaction Delivery Approach v4.jpg

The delivery approach we have developed and matured, covers all aspects of complex full lifecycle execution and has been designed to be highly scalable, adaptable and robust in the face of post-transaction complexity. We recognise that the best way to overcome overwhelming complexity is to expose the fundamental conceptual models, continuously strive for clarity of vision and to simplify without over abstracting. Governance must operate at multiple levels and perspectives and cohesively support the post-transaction programme transformations.

Specialist methods are also required to enable full realisation of the transaction value and require alignment across both target and acquirer.  These methods require client capabilities and competencies which may or may not be readily available. It is critical that any competency or capacity gaps are identified and addressed as early as possible and as required we can assist with the provision of proven resource or advise on the resource requirements. Please contact us for further informationbutton 2.jpg.