Erik Roth

A company needs to be really clear on why they’re acquiring something. If it’s an acqui-hire, then it’s the talent. If it’s a business-model acquisition, it’s the business, the technology, and the IP [intellectual property]. There are lots of different reasons. So first, be super clear on why you’re acquiring something. And then, I always like to say, there’s pitchers and catchers. The pitcher is … [ Read more ]

How Lots of Small M&A Deals Add Up to Big Value

New research confirms that companies that regularly and systematically pursue moderately sized M&A deliver better shareholder returns than companies that don’t.

M&A Engines: Revving Up for M&A Success

Large in-house M&A teams are no longer seen as the only game in town. Leading companies are taking charge of their M&A destiny by smartly combining internal and external resources.

Oliver Engert, Max Floetotto, Greg Gryzwa, Milind Sachdeva, Patryk Strojny

At the start of a typical integration effort, the integration team uses the deal model and due-diligence results to identify opportunities and set synergy targets. But financial due diligence is seldom deep or exhaustive enough to provide a solid foundation for maximizing value because the effort focuses on justifying the deal, not on creating value (in other words, “figure out what to pay for the … [ Read more ]

Realizing the Value of Your Merger with the Right Operating Model

Substantial changes to an operating model are often necessary to achieve an organization’s strategic objectives and deliver the promised value of a merger. Making these changes requires a thoughtful, leader-driven process to navigate the unique constraints and risks of the endeavor.

Eight Basic Beliefs About Capturing Value in a Merger

To maximize deal value in a merger, focus on critical principles.

Communications in Mergers: The Glue that Holds Everything Together

Structured communications are vital to clarify what comes next in a merger, separate fact from fiction, and forge success for newly combined organizations.

Seven Rules to Crack the Code on Revenue Synergies in M&A

Companies pursuing revenue synergies can’t take them for granted. Leaders need a clear grasp of where those synergies lie—and the persistence to capture them.

One Reason Mergers Fail: The Two Cultures Aren’t Compatible

There is a fault line where tensions often erupt in mergers. This fault line is what we call tightness versus looseness. When tight and loose cultures merge, there is a good chance that they will clash.

Tight company cultures value consistency and routine. They have little tolerance for rebellious behavior, and use strict rules and processes to uphold cultural traditions. Loose cultures are much more fluid. … [ Read more ]

How Business Models Can Make or Break a Merger

Discount, premium, online-only, you name it: how a company “does business” is as important, or more so, than the geographic or product market in a merger. According to research by Timo Sohl and Govert Vroom, when two companies have similar business models, they make better partners.

Danaher’s Instruments of Change

Distinctive capabilities have been central to Danaher’s success since the mid-1980s, when Mitchell Rales and Steven Rales, two brothers who owned a commercial real estate business, discovered they had a knack for buying and turning around ailing manufacturing companies. Over the years, the company had evolved from a highly leveraged startup to a profitable family of ventures with a market capitalization of more than US$40 … [ Read more ]

A Deal-Making Strategy for New CEOs

New CEOs typically raise the tempo of transactions at first, then the pace slows down. Is that costly?

The Six Types of Successful Acquisitions

Companies advance myriad strategies for creating value with acquisitions—but only a handful are likely to do so.

Building the Right Organization for Mergers and Acquisitions

The internal organization that manages a company’s M&A processes has always been a major contributor to the success of its deals. Today, as companies increasingly choose to manage their M&A processes internally, without the support of financial advisers, it’s all the more important to have the right team in place. This team must not only be skilled at screening acquisition targets, conducting due diligence, and … [ Read more ]

How the Best Acquirers Excel at Integration

The same handful of integration challenges vex companies year after year. New survey data suggest how high performers stay on top.

A 5-Step Process for Reorganizing After a Merger

Reorganizations can be a useful management tool for finding new value and are often essential as part of a merger or acquisition integration. Getting this type of reorganization right allows business units from the merging companies to be brought together smoothly, corporate activities to be standardized and streamlined, people to be aligned behind desired outcomes, and integration synergies to be delivered quickly. To help maximize … [ Read more ]

Rebecca Doherty, Spring Liu, Andy West

Because there are often different owners throughout a company’s M&A process, it can be particularly tricky to put proper incentives in place for each one. So, incentives must balance the promotion of post-integration success with the successful execution of an individual’s role.

Marc Goedhart, Tim Koller, David Wessels

As an illustration of how executives get caught up in a short-term EPS focus, consider our experience with companies analyzing a prospective acquisition. The most frequent question managers ask is whether the transaction will dilute EPS over the first year or two. Given the popularity of EPS as a yardstick for company decisions, you might think that a predicted improvement in EPS would be an … [ Read more ]

Deals That Win

Twelve years of data shows that mergers and acquisitions that apply or enhance capabilities produce superior returns.