M&A Framework for Success - short
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This document summarizes key information on mergers and acquisitions (M&A) from research conducted by VSC Growth. It outlines that global M&A transactions exceed $2 trillion annually, with deals increasing post-recession. However, on average only 1/3 of deals create value, while 1/3 destroy value. The document then presents a 7-step framework for M&A success, including committing to improve outcomes, understanding your approach, focusing on key success factors, and diligently executing each deal. Contact information is provided to learn more about applying the practical framework to create value from M&A transactions.
M&A Framework for Success - short
- 1. Mergers & Acquisitions: Part 2 Practical Framework for Success - HighlightsSteve CooteDirector, VSC GrowthFeb 2011www.vscgrowth.com.auCopyright © 2011. All Rights Reserved. VSC Growth
- 2. The MarketGloballyM&A transactions > US $2 trillion p.a. ($2,000,000,000,000)
- 3. Transactions increasing post GFC
- 4. Emerging markets now represent 30% of global volumeAustraliaM&A transactions > US $130 billion p.a. ($130,000,000,000)
- 5. Current annual growth >10%Source - Thomson Reuters Oct 2010
- 6. The Market - Why M&A?“To grow or protect shareholder value and returns”Source Towers Watson
- 7. The Research The results of the research are presented in our: Mergers & Acquisitions Part 1 – 2011 Research ProjectThe research has been combined with our direct experience to provide practical guidance to those involved in M&AContact Steve Coote on +61 412 148428 or steve.coote@vscgrowth.com.auwww.vscgrowth.com.au
- 8. Framework for success - IntroductionThe Framework for Success addresses the questions arising from the research:If the evidence shows such a consistently average track record, and there is so much guidance on how to do it well, then why doesn’t it change?
- 9. If we want to improve our approach, what are the fundamental things we need to?
- 10. What support is available?Framework for successSurprisingly the research didn’t answer the question as to why, after 30 years, little has changed … but perhaps??Incentives to grow companies outweigh the consequences of M&A failure
- 11. Companies continue to underestimate the resources necessary for integration and the realisation of synergies
- 12. Success relies on managing diverse and complex ranges of people and cultures… and this is not easy
- 13. If the original M&A goals are not met, there is a tendency for 2nd best to still be considered a successFramework for success - SummaryStep 1 – Commit to improve on the status quoStep 2 – Understand your M&A modelStep 3 – Recognise the 3 key success factorsStep 4 – Create a robust strategyStep 5 – Develop your processes & peopleStep 6 – Execute each merger diligentlyStep 7 – Enjoy your success
- 14. 1/3 Destroy Value1/3 Maintain Value1/3 Create ValueSignificant Value CreatedFramework for Success Step 1 – Commit to improve on the status quoValue CreatedNegligible Value Created“It is unrealistic to achieve perfection, but we should be seeking improvement”Value MaintainedImprove some of theseMaximise theseNegligible Value DestroyedEliminate theseValue DestroyedSignificant Value Destroyed“What difference would this result make to your organisation?”Copyright © 2011. All Rights Reserved. VSC Growth
- 15. Framework for Success Step 2 – Understand your M&A modelHow do you currently do M&A, what works what doesn’t? What do others do?The Deal(Pre-Completion)Implementation(Post-Completion)Copyright © 2011. All Rights Reserved. VSC Growth
- 16. “This is our M&A framework; everyone knows what they have to do”Framework for successStep 6 – Execute each merger diligently
- 17. Framework for successStep 7 – Enjoy your successDeliver the promise of increased shareholder value
- 18. Celebrate what you do well
- 19. Reduce your risks by learning from others mistakes
- 20. Benefit from on-call experience
- 21. Build the skills & confidence of your support team
- 22. Uncover latent opportunities on old deals
- 23. Focus your energies where you can create the most value
- 24. Be prepared when the next deal comes off
- 25. Enter the next deal with greater confidence in the outcomeIf you would like to create more value from your growth initiatives, VSC Growth is ready to help you:Mitigate the risks of bad deals
- 26. Turn average deals into value creators
- 27. Extract value from already completed deals
- 28. Build your company’s success rate in M&AWe will do this by:Understanding your business
- 29. Personal service and considered advice
- 30. Experience and a practical approach
- 31. Focusing on creating enduring valueFramework for successContact Steve Coote on +61 412 148428 or email your enquiry to steve.coote@vscgrowth.com.auwww.vscgrowth.com.au
- 32. Want a closer look at the Framework?A more detailed outline of what works is addressed in our presentation: Mergers & Acquisitions Part 2 - Practical Framework for SuccessThe Framework combines our direct experience with the research to provide practical guidance to those involved in M&AContact Steve Coote on +61 412 148428 or steve.coote@vscgrowth.com.auwww.vscgrowth.com.au