No more hit and miss: Delivering total M&A value

February 01, 2018

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From the adrenaline of the negotiations to the chance to put a lasting stamp on the business, deal making can be exhilarating and competitively game-changing.

And with acquisition and disposal set to play a key role in accelerating technological transformation and laying the foundations for future growth in today’s fast-evolving financial services (FS) marketplace, getting M&A right has never been more crucial.

Yet all too often deals go horribly wrong, with the hangover setting in even before the ink is dry and the champagne glasses have been cleared away.

Why leave M&A to chance?

Given my deal experience, I’m regularly asked why some work and others fail? From what I’ve seen in all too many cases, a better question would be why has so much been left to chance – an expensive hit and miss? Pushing through a transaction without a clear indication of the strategic objectives (the ‘why’) and detailed plans for realising them (the ‘how’) is irresponsible. It’s the equivalent of an orchestra trying to perform without a play list, score or rehearsal.

Where everything clicks, this is the result of clear vision and thorough preparations. Even in instances involving many different markets and operating entities – the GE Capital divestment programme being a clear case in point – there’s no hit and miss in these successful transactions. From the board through to the operational teams on the ground, everyone is clear about how M&A fits into overall business objectives and where the value creation is going to come from/how it could be lost. They’re also clear about who needs to do what to ensure effective buy-side targeting and integration or sell-side communication and separation, recognising that the hard yards start rather than end when the transaction is signed.  

End-to-end orchestration

So how can you make M&A work for your business? At PwC, we believe that successful deal making demands end-to-end orchestration, from identification through to realisation. And we have a dedicated conductor – the ‘deal architect’ – who brings together all our various specialists to help you create and deliver total M&A value:

1. Developing the investment thesis

We analyse the changing dynamics within clients’ markets and how acquisition and divestment could enhance their ability to compete as part of an enduring (typically a three to four year) strategic plan.

2. Identifying the deal drivers

In identifying targets and carrying out due diligence evaluations we don’t just look at the potential risks, but also the opportunities for value optimisation. We can then determine a series of specific drivers (typically six to eight) in areas such as market access or operational efficiency through which value will be delivered and progress against objectives can be judged.

3. Delivering on time and on budget

Building on the deal drivers, we then draw up achievable separation/integration plans, guide clients through the critical paths and help keep executives aligned around the common goals to ensure the M&A gains are delivered on time and on budget.

This approach doesn’t just ensure a strong strategic underpinning for M&A, it also gives the process all-important clarity, momentum and personal accountability. Believe me, it’s no less exhilarating as a result –my team and I have a real passion for deal making. But we realise that success demands attention to detail and a long-term commitment – failing to prepare is preparing to fail.

In coming blogs, we’ll be exploring the deal dynamics in the different Financial Services sectors. In the meantime, if you’d like to discuss any aspect of M&A and how to make the most of the potential, please feel free to get in touch.

Chris Samson |  Partner, Delivering Deal Value
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