According to Kpmg, a successfully M&A operation model is the final product of three main ingredients: robust strategic plan, a clear understanding of the ratio between opportunties and threats and the ability to capture value. At the very beginning of the operation, companies should have a well defined vision of success, and an assumption which must hold true to support this. If to have a clear strategic rational is the first step, to meet targets is the second one. Indeed, the manner in which a company meets its first target, sends an important message.
The third step is to sort out a good structure for the deal. That is to say that in the acquisition, the net return should be maximized, while the value of the business should be protected. The operational team should then be focused on the validation of the value hypothesis to better understand the operational and commercial drivers and risks. Consequently, and this is the fifth point, one should be able to understand the people and the culture belonging the new company’ system. A very strong alignment, moreover, between the two organizations involved in the M&A is the reason why a partnership succeeds. Early on, companies need to discuss their respective roles and how to align the strategic level.
But a question is urgent: does an acquisition appear on the CEO’s agenda? Today’s eco is focused on growth and establishing their organization as a market leader. In today’s rapid rate of change, they realize that they cannot do it all by themselves. In addition, the CEO needs to look at M&A as a strategic component of the business as well as a core component of the business strategy, not a tactical set of relationships around the edges. As the eco and companies increasingly focus on innovation, acquisitions are viewed as sources of ideas, because they get additional insight into what is happening in the market.
Finally it is not to be forgotten that, very often, what gets measured, gets done. So write down the benefits and track them constantly.
According to the Kpmg partner Paolo Mascaretti, “The sector is now very attractive for financial investors that are interested in obtaining full potential, in terms of export”.