After helping many of our clients execute their corporate merger, acquisitions or divestitures (MA&D), perhaps the only consistency we have found is that little, if any, due diligence is done on the involved parties’ ability to execute the action. While companies certainly go in with good intentions of conducting proper due diligence, it’s often not possible or even practical given the dynamics of the situation. Speed may be required to get the deal done, and confidentiality may require the activity to be held very closely. What may have begun as noble ideas in the boardroom, we see many companies mired in long, post-deal integration initiatives that consume extensive amounts of time and resources from the company.
Today, MA&D deals are accelerating at an even faster pace. The dichotomy of lower valuations in conjunction with strong balance sheets has created an environment ripe for acquisitions as companies seek to make the best use of their available cash. During that same period, leading companies have focused more and more on their core competencies, simplifying their business models by divesting portions of their business not directly related to those core competencies. Last year, there were over 20 major corporate spin-offs, and we expect activity will be even higher this year.
Are You Ready to Execute a Corporate Merger or Acquisition Today?
If your CEO came to you today with an acquisition or divestiture to execute, would you be ready? In this dynamic environment for structural corporate change, leading companies have MA&D as a defined part of their operating strategy. Companies that can quickly execute on these acquisitions and divestitures will be the ones who will lead in tomorrow’s business climate.
Leading companies will have the ability to quickly execute on corporate restructurings, allowing them to flex their strategies to meet market demand. We will see an environment of “haves” and “have–nots” related to those who are able to successfully execute their strategy and adapt quickly to changes in the marketplace. How do you make sure your company is one of the “haves”?