Author: Carlos Keener

I try to follow the various recent deals within the US airline sector, and amongst the predictable post-close challenges around union negotiations, booking systems integration etc, this note really caught my eye: Diana Moss, VP of the American Antitrust Institute (AAI) recently testified in the US Airways–American Airlines merger review, voicing her concerns about the deal. Alongside the predictable concerns related to market share and the potential to exert anti-competitive behaviour, out came this zinger: “An increasingly important factor in the efficiencies debate is post-merger integration".

Distressed businesses have usually bagged all the low-hanging fruit in their previous attempts to save their business. This leaves the hard work to the acquirer. Picking up the pieces may be easy; getting them back into a working state is a challenge. That’s why they're cheap.  Unless the value centres around untapped capabilities only you can exploit, the safer guide is that the lower the deal price on offer, the harder it may be, ultimately, to deliver results with the acquisition. This is the final part of our three-part series

[caption id="attachment_285" align="alignleft" width="58"]Coordination groups M&A Co-ordination - all important![/caption] In large businesses, getting an acquisition from opportunity to signature is one of those few key activities that demands seamless collaboration between Corporate and Business Unit entities. In many cases one group pays for the deal, while the other lives with the results. While this may seem a logical split of roles, it can result in a number of misaligned priorities and other systemic flaws in the pre-close process: Business Units not fully understanding the deal rationale, making it hard for them to truly get behind the delivery of the benefits; Corporate Strategy or M&A groups building synergy models and assumptions insufficiently underpinned by operational realities; lack of accountability between Corporate and BUs over execution, leading to finger-pointing if things go wrong.

[caption id="attachment_263" align="alignleft" width="150"]Distressed M&A Part 2[/caption] Distressed businesses have usually bagged all the low-hanging fruit in their previous attempts to save their business. This leaves the hard work to the acquirer. Picking up the pieces may be easy; getting them back into a working state is a challenge. That’s why they're cheap.  Unless the value centres around untapped capabilities only you can exploit, the safer guide is that the lower the deal price on offer, the harder it may be, ultimately, to deliver results with the acquisition. This series of articles (this is part two of three) examines the world of distressed M&A.

[caption id="attachment_263" align="alignleft" width="150"]Distressed M&A Part 1[/caption] Distressed businesses have usually bagged all the low-hanging fruit in their previous attempts to save their business. This leaves the hard work to the acquirer. Picking up the pieces may be easy; getting them back into a working state is a challenge. That’s why they're cheap.  Unless the value centres around untapped capabilities only you can exploit, the safer guide is that the lower the deal price on offer, the harder it may be, ultimately, to deliver results with the acquisition. This series of articles (3 parts) examines the world of distressed M&A.

[caption id="attachment_257" align="alignleft" width="150"]Good v bad acquisitions Honeywell - serial acquirer?[/caption] An interesting piece caught my eye: it's about Honeywell's approach to acquisition (read it here). They are evaluating about 100 potential acquisition targets and one of their criteria is how easy they will be to integrate. Businesses that undergo multiple acquisitions are often called ‘serial acquirers’, which has both good and bad connotations.   Good, in that if done properly it can be a strategic deployment of capital in order to obtain capability, market reach and process performance that all enhance value and shareholder confidence. Definitely not to be sneezed at.  Getting it wrong, on the other hand, can lead to a destruction of all this and the CEO’s career to boot.

[caption id="attachment_249" align="alignleft" width="150"]Dell M&A Dell - big M&A spenders - but good?[/caption] How does a business model change after an acquisition?  I was wondering about this in the light of a recent article on Dell’s buying spree (here) in which the success of its acquisition strategy was called into question.  For Dell, the strategic rationale for its M&A strategy has been to move it away from hardware to enterprise solutions.  So this means that Dell’s business model has to change – the way Dell generates revenue and the component parts of the company that support that.

[caption id="attachment_215" align="alignleft" width="150"]Culture; M&A; Integration To see or not to see...[/caption] I saw this case study about cultural fit in an M&A by Mary Teresa Bitti – the company in question is Vancouver-based The Little Box Company. It’s great to read a case study where cultural considerations are a key part of an acquisition strategy. All too often it’s in the bloody aftermath of why it didn’t work, or return the value expected, that ‘cultural incompatibility’ is cited as a main factor.

China M&AAccording to figures compiled by consulting firm DC Advisory, China has now overtaken the UK, Canada and Germany to rival Japan and the US as the nation with the world’s most acquisitive companies. Significantly, the report suggests that alongside the well-known tale of breakneck growth and increasing consumerism, “China is attempting a huge shift from an order-taker to an innovator, producing leading technology and infrastructure for both domestic and global markets.”1 What does this mean for ‘Western’ entities intending to join forces with a new Chinese parent company?

[caption id="attachment_152" align="alignleft" width="106"]Successful M&A secrets; mergers and acquisitions PART FOUR - FINAL PART[/caption] This is the concluding part of a series of articles by BTD Founding and Managing Partner Carlos Keener Study after study still puts the failure rate of mergers and acquisitions somewhere between 70% and 90%. Some however have managed to turn acquisition and integration into a true competitive differentiator. What makes these firms consistently successful at M&A, and what can the occasional acquirer learn from them? In conclusion, here's a quick checklist: