Jabian Consulting recently completed a thorough survey of M&A professionals around the country to take their pulse about why deals succeed or fail, learn best practices for post-merger integration, discover how companies think about what defines success, and much more. The following is a snapshot of the insights from that survey.
What About Value?
There are many reasons to buy or sell all or part of a company. Geography, market share, expanded product offerings, and access to capital are all reasons we heard from the survey. Very few people talked about value as a primary goal for doing a deal.
96 Percent
of M&A professionals believe that nearly
half of all deals return negative value.
100 Percent
of M&A professionals believe that nearly
half of all deals return negative value.
The degree of difference between how Buyers and Sellers think about various M&A activities:
Agreement
Buyers and Sellers generally agree on a variety of things, such as which department is most often scrutinized during due diligence (Finance), what is the leading factor to potential post-merger value drain (poor communication), and the No. 1 cause for concern during integration (customer retention).
20% Margin
Sellers (93%) are
20 percent more likely to rank cultural fit as critically important to integration teams than are Buyers (77%).
111% Margin
Sellers (38%) were more than
twice as likely than Buyers (18%) to say the deal team going away would be a cause for draining value in post-purchase activity.
126% Margin
When it comes to
sales and marketing managers being involved in due diligence, Buyers (15%) were willing to get the department involved less than half of the time as Sellers (34%).
136% Margin
By a margin greater than two to one, Buyers (52%) over Sellers (22%) reported having an effective, formalized transition plan from the due diligence team to the integration team.
Packed inside Jabian’s Value & Integration Management Office whitepaper are more than 61 insights and critical decision factors relevant to anyone on the buy or sell side of a deal.
The degree of difference between how the most experienced M&A professionals and the least experienced think about various M&A activities:
Agreement
Experienced and Inexperienced professionals generally agree on a variety of things, such as which department is most often scrutinized during due diligence (Finance), what is the main objective of their M&A activity of the next three years (expanding geographies), and the percentage of M&A activity returning positive value (57%).
46% Margin
Experienced pros (66%) we’re almost 50 percent more
likely than those inexperienced to say inadequate due diligence was of great concern when it comes to value-draining activities.
74% Margin
Inexperienced pros (47%) were much more likely to say speed was an important factor in an integration than Experienced pros (27%).
154% Margin
When it comes to sales and marketing managers being involved in due diligence, Inexperienced pros (11%) were willing to get the department involved less than half of the time as those with more Experience (28%).
266% Margin
When it comes to reasons why
some post-merger integrations fail, Experienced pros (33%) were more than three times as likely as Inexperienced pros (9%) to cite focusing on accomplishing
tasks, not value.
Jabian’s Value & Integration Management Office (VIMO™) focuses on the most fundamental, yet often overlooked aspect of mergers and acquisitions — value. Whether you’re on the buy side, sell side, internal corporate staff, or outside investor, Jabian’s perspective on value-focused integrations can mean the difference between success and failure when doing deals. In the VIMO™ whitepaper you have access to:
- The top reasons why deals fail or succeed
- Critical differences between a buyer’s and seller’s post-merger goals
- A guide to avoiding the most common traps companies face during M&A activity
- A proven value-focused framework for approaching M&A activity from pre-purchase through post-merger integration
- Industry-tested benchmarks for your M&A and project management teams
