Winning bigger: Turning a good deal into a transformational deal

November 27, 2019

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by Nick George Partner, Transaction Services

Email +44 (0)7909 680182

Our latest research reveals that successful deals in Technology, Media and Telecommunications (TMT) can outperform those in other sectors. But at the other end of the spectrum, quite a lot of transactions come up short. What then marks out the deals that deliver from those that don’t, and how can your business win bigger?

In November, I had the great privilege of attending the UK Tech Awards. The event provides a wonderful opportunity to learn about how award-winning TMT companies are pushing the boundaries of innovation in the UK economy.

We have also just launched the results of our Creating value beyond the deal: technology, media and telecommunications report, in which we asked 100 industry dealmakers about the drivers for their recent transactions and how they performed. We also asked them what they think had the most impact on delivering value and what they would do differently next time.

Driving success

Both the inspiration from the awards and the findings from our research offer a chance to reflect on what marks out the front runners in this fast-moving sector and the role of M&A in realising strategic objectives. 

From recent start-ups to market leading unicorns, the UK Tech award winners represent a fairly diverse array of sizes and sectors. What all have in common is a track record of rapid growth. And, for many, M&A has been a crucial part of that journey. 

This chimes with the findings in our report, which shows that effective dealmaking in TMT offers the opportunity to win bigger – deals with positive returns generate an average 86% return over 12 months (against an average of 68% in other sectors). The transformational potential not only includes acquisition of technology, but also the innovative talent behind these developments – winning people. There are also opportunities to develop thriving ecosystems of joint ventures and informal collaborations.

The analysis in our report provides clear insights into why some deals work much better than others. Looking at the experience here in the UK, which is amply reflected in many of the award-winning companies, three points stand out for me:

1/ Clear strategic objectives 

Systematic focus on the drivers of value creation and how the deal fits into that blueprint in areas such as target talent and technology. There is still a place of opportunistic deals, but they don’t tend to perform as well.

2/ Embracing the rainmakers 

Ability to identify, incentivise and retain key talent. Many of the most critical people don’t occupy the most prominent positions. But you can seek out the rainmakers through steps such as looking at the communications between developers – there are now tools to support this.

3/ Eyes on the prize 

Ready to go with a clear plan for integration, talent retention and value from day one. Our research shows that 35% of TMT deals prioritised value creation from day one, with only customer retention prioritised ahead of it at 36%.

Ahead of the game 

So, congratulations to all the amazing winners at this year’s UK Tech Awards. And if you want to find out more about how these and other companies are able to stay ahead of the game, why not take a look at the insights from successful dealmakers in our new report.

by Nick George Partner, Transaction Services

Email +44 (0)7909 680182