December 10, 2010 | Written by: Jill Tutino
M&A takes time, but who has time these days?
One of the overarching themes for our M&A Accelerator solution is “Accelerating Deal Cycles.” Why? It ends up that the faster you can acquire and integrate a company (assuming of course you do so in a high quality manner) the sooner you can realize synergies (which are quite valuable according to Wall Street).
Time is also important because throughout the M&A process the enterprise consumes a ton of costly resources. Consider the out of pocket costs for outside counsels, accountants, and consultants (or even internal, if these folks are on the corporate payroll). Add to that all the internal resources being distracted and consumed by the deal (be it in diligence, integration, etc.), which seemingly are free, since there is no direct cost, after all, they work for you. Well throughout the 12-18 month deal cycle there are a gazillion meetings and all sorts of resources taken out of their “day job” and co-opted to a deal team – pretty expensive!
Leading acquirers have figured out how to do more, quicker, with less people. They recognize that time is very, very, very valuable. More importantly they focus on time at all phases. And most importantly, M&A Technology allows them to do this without compromising quality of the integration. By accelerating certain (not all) integration activities we can potentially realize synergies sooner. We can also minimize the impact of negative synergies. Also, since deals are supposed to be “uber-secret”, the cost of a leak is often much greater than the perceived cost of doing a bad deal.
Leading edge acquirers overcome the challenges of time by focusing on the right issues first. They bring in experts at the right time with an agenda of finding and testing the big stuff (like the Value Drivers for the deal). Automating the collection of data, issues and risks that can be captured, catalogued and then spirited into the hands of the integration planning team in an automated fashion, can truly enhance the chances for smart, fully reachable and achievable synergies for every deal. Using a solution like M&A Accelerator should be looked at as a best practice that all companies doing or considering acquisitions should be looking at standardizing into their transactions, along with the right, proven M&A consulting resources, at the right time. These two things can significantly increase a transactions’ success rate. Otherwise, it just adds up to another unsuccessful deal.