Executive Briefings

Dispensing With Financial Advisors, Companies Need Proper Teams in Place for Successful M&A Deals

The internal organization that manages a company's M&A processes has always been a major contributor to the success of its deals. Today, as companies increasingly choose to manage their M&A processes internally, without the support of financial advisers, it's all the more important to have the right team in place.

Dispensing With Financial Advisors, Companies Need Proper Teams in Place for Successful M&A Deals

This team must not only be skilled at screening acquisition targets, conducting due diligence, and integrating acquired businesses but also have the size, structure and credibility to influence the rest of the company.

Admittedly, most of the best practices for designing an M&A organization are well known. But, in our experience, many companies fail to put them into practice. M&A teams include members with unnecessary skills as often as they lack members with essential ones. Too little capacity is a common problem, but inflated teams frequently create issues as well. The effect on a company's ability to capture value from its deals is notable. According to our 2015 survey, high-performing companies are significantly more likely than low-performing ones to report that they have the necessary skills and capacity to support essential pre-deal activities. Moreover, nearly two-thirds of underperforming companies lack the capabilities to integrate their acquisitions.

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This team must not only be skilled at screening acquisition targets, conducting due diligence, and integrating acquired businesses but also have the size, structure and credibility to influence the rest of the company.

Admittedly, most of the best practices for designing an M&A organization are well known. But, in our experience, many companies fail to put them into practice. M&A teams include members with unnecessary skills as often as they lack members with essential ones. Too little capacity is a common problem, but inflated teams frequently create issues as well. The effect on a company's ability to capture value from its deals is notable. According to our 2015 survey, high-performing companies are significantly more likely than low-performing ones to report that they have the necessary skills and capacity to support essential pre-deal activities. Moreover, nearly two-thirds of underperforming companies lack the capabilities to integrate their acquisitions.

Read Full Article

Dispensing With Financial Advisors, Companies Need Proper Teams in Place for Successful M&A Deals