Merger & Acquisitions
ProGuide has worked with clients on dozens of mergers with transactions ranging from $20 million to nearly $3 billion. We have helped conceptualize and initiate some of these deals while facilitating and discreetly brokering others. However, in most instances we were involved in various stages of the transactions. Our skills cover numerous aspects of “the deal,” including identifying potential targets, planning and executing due diligence, working through the laborious negotiations leading up to the LOI, and then helping our clients integrate the entities after a successful conclusion to the deal.
Of course, as reported by numerous respected business publications like the Financial Times, Forbes, and The Harvard Business Review, between 80-90% of potential mergers never come to fruition. Then, of those that are consummated, approximately half fail. It’s virtually a coin toss. How can ProGuide help improve these odds for you?
We are impartial! We will work for you as an advisor to help you understand the likelihood of success early in the process in order to minimize false starts. Billions of dollars are wasted each year on deals that should have never got past the first Stage Gate. Once this hurdle is passed, however, it’s imperative that you understand the potential pitfalls to the deal: strategic fit, cultural orientation, market dynamics, operational deficiencies, leadership concerns, etc. Our process of assessing 14 key areas of a target’s culture, finances, management, operations, and strategy has proven vital in ensuring success. Plus, we will provide an independent viewpoint to help you ascertain the following:
- Determine True Long-Term Strategic Fit
- Develop a Realistic Timeline for the Entire Process
- Focus on Key Diligence Topics that Could Derail the Deal
- Identify Real Synergies, not the usual pie-in-the-sky ‘Wishful Thinking’ Ones
- Identify and Retain Critical Talent
According to the Daily Telegraph, a well-regarded daily broadsheet newspaper based in London, there are ten primary reasons why mergers fail to materialize:
- Ignorance While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership, there is enough crucially important and legally permissible preparation work to keep an integration team busy for several months before day one. Most chief executives don’t know this and they waste the time that could be put to good use while they await clearance from the regulatory authorities. Good preparation means the integration can kick off on day one. Speed matters.
- No common vision In the absence of a clear statement of what the merged company will stand for, how the organisation will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organisations will never blend.
- Nasty surprises resulting from poor due diligence This sounds basic, but happens so often.
- Team resourcing Resource requirements are very often underestimated. It can take two or three months to release the best players from daily business to join the integration team(s), find a backfill for them, sign up contractors to fill the gaps and set up the team’s infrastructure. Most companies start too late and are not ready on once the deal is completed.
- Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organisations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
- Poor communication Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
- Poor programme management Insufficiently detailed implementation plans and failure to identify key interdependencies between the many workstreams brings the project to a halt, or requires costly rework, extends the integration timeline, and causes frustration.
- Lack of courage Delaying some of the tough decisions that are required to integrate two organisations can only result in a disappointing outcome. Making those decisions will not please everyone, but it has the advantage of clarity and honesty, and allows those who do not find the journey and destination appealing to step off before the train gathers too much speed.
- Weak leadership Integrating two organisations is like sailing through a storm: you need a strong captain, someone whom everyone can trust to bring the ship to its destination, someone who projects energy, enthusiasm, clarity, and who communicates that energy to everyone. If senior managers do not walk the talk, if their behaviours and ways of working do not match the vision and values the company aspires to, all credibility is lost and the merger’s mission is reduced to meaningless words.
- Lost baby with bathwater Companies contemplating a merger or acquisition too often omit to pinpoint what particular attributes make the other party attractive, and to define how they will ensure those attributes will not get lost when the organisation and the culture have changed. Culture cannot be bought – it needs to be embraced.
ProGuide can you mitigate most, if not all, of these pitfalls. Engaging experienced resources like us to augment your own teams’ efforts improves the chances that you don’t go down the wrong road and, once you have decided that the road is worthy, we’ll help you reach your destination … safely and on-time.