Pre-pandemic, there was a historic amount of capital available for mergers, acquisitions, and other investments. Companies are now in a different place. For many, understanding the company’s portfolio and deals strategy is essential for future success. Those with a long-term strategic M&A plan aligned to corporate strategy and value creation are more likely to make successful deals.
No matter your goals, we help you identify the right merger or acquisition to bolster your business strategy. We support you in implementing a sound deal execution and capturing hidden value throughout the entire merger and integration process.
Whether you’re looking to grow your business or extend into new areas, the acquisitions market is defined by its complexity and pace. Every stage of the deal, whether strategy assessment and targeting, deal structuring, due diligence, valuation, or integration can prove difficult to navigate. We'll help you craft a plan that enables better decisions and creates value.
Consumer behaviours are shifting rapidly and the pace of technological change isn’t slowing. As companies consider gaps in their portfolios or focus on new solutions to shore up operations, there may be opportunities for acquisitions or alliances that can jumpstart innovation.
Companies should consider the following questions:
What products and services are important to our customers now, and how are we considering whether or not to develop them?
Are we considering whether we have the culture, talent, and capabilities to achieve success with these innovation ideas?
What is our investment plan—both organic and inorganic—as we move forward?
Have we considered potential disruptors in the short and long term?
Would long-term capital be more prudently used in an alliance or joint venture, or does rapid change require an acquisition?
Businesses want sources of long-term capital and interest rates that remain low. That means significant discipline is needed in setting capital allocation and portfolio strategy to achieve the highest returns. If a company is not the best owner of certain portfolio assets, there is a cost. The return on capital expenditures for organic growth and acquisitions for inorganic growth are crucial in this environment.
Companies should consider:
Are we funding our opportunities with the right mix of capital - debt and equity - and the right transaction structure?
Is our capital allocation strategy driving appropriate returns on capital, with the discipline to redeploy if the returns are inadequate?
With an abundance of capital available, companies are commanding high multiples.
However, paying a high price on M&A transactions, even a premium over currently traded market values, doesn’t necessarily mean overpaying as long as the buyer has a clearly defined strategy for value creation. In addition to financial sources of value, dealmakers are increasingly attributing value to non-traditional sources such as resilience and purpose. Greater commitment to ESG factors is also changing the way businesses are valued and their attractiveness to investors.
Both society and the investment community realise the need to address sustainability and climate change. They also need to address societal issues such as wage inequalities, diversity and inclusion, public safety, and privacy. ESG is now being built into the core of organisations, as part of their purpose, values and mission.
It is also a factor in both investment decisions and value determination. We are seeing investors allocate more capital to new investments in energy and renewables, reducing exposures to carbon-intensive assets, and managing the value chain in a more sustainable manner.
Of all the ways a company can grow, acquiring another company, complete with its own employees, operating systems, and footprint, is among the most challenging. The bigger the acquisition, the bigger the challenges.
A thorough understanding of integration strategy and execution is crucial to achieving a deal’s true potential. We work hand in hand with you to increase your operational knowledge of target companies. Together, we’ll identify all of the opportunities, from due diligence through to post-close value capture.
The fundamentals for successful deal making haven’t changed. Companies that have clear strategies and acquisition targets that fit those strategies are well placed to create value from the deal.
We work hand in hand with you to develop the right investment strategy. We help identify key priorities for growth including markets and adjacent markets you could thrive in, and how inorganic growth fits into this. We can also help determine if there are any parts of your business that are underperforming or would be more valuable to others.
Our industry specialists and international network can help you to identify the right acquisition target to fit with your strategic ambition.
Once your acquisition targets are identified we can support you in placing a value on it and assess your funding options and deal structure.
We perform comprehensive due diligence reviews which covers a range of areas. These include financial due diligence, commercial and market due diligence, business plan reviews, taxation and pensions reviews and synergy validation. We assess the reliability of the reported results to estimate earnings, future cash flows and to identify any issues. We have invested heavily in data and analytics technology to deliver better insights for you.
We support you in executing the transaction and developing your bid strategy. We assist with negotiating heads of terms, considering integration issues and finalising the legal agreements which play a key part of any transaction. We work with you and your legal advisors to secure the right deal for you. We ensure that key financial and accounting issues are addressed and you achieve the objectives you’ve set for the transaction.
We have extensive experience of helping businesses integrate new acquisitions. Our teams comprise many individuals with "in-line" industry experience. We have developed specific tools and techniques that have proved their worth in other transactions from first 100 day integration plans through to developing synergy cases. Their early application can save considerable time and money.