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 asset versus what to do with the asset”). Additionally, diligence proceeds quickly, with limited access to target information, and management bias toward the deal can skew diligence results.
Authors: Greg Gryzwa, Max Floetotto, Milind Sachdeva, Oliver Engert, Patryk Strojny
Source: McKinsey Quarterly
Subject: Mergers & Acquisitions