The formula that transforms the probability of success when growing your business with M&A
The M&A Formula brings together decades of research and case studies from recognised leaders into a model that anybody can use to grow their business using M&A, no matter large or small. Whether you see it as avoiding the painful failure that currently runs at a Global average of over 50%, or stacking the cards in your favour, business model-driven M&A will definitely help you win by either seizing opportunities from your competition, or failing fast – before it really hurts you.
M&As fail because the thinking surrounding them fails the rigour of scientific examination; by observing the results of conventional processes and positions, the need for new direction becomes apparent. This book presents a new set of tactics based on data from high-profile M&As, constructing a modern map of practical and business model-driven tactics that succeed in the real world. Case studies of successful deals illustrate on-the-ground implementation of a new M&A model, and tactics formulated by M&A specialists equip you with the wisdom to avoid common pitfalls and costly errors.
The M&A sector is continuing to grow, and the trend shows no sign of slowing. Business leaders need a robust, business model-driven M&A strategy for handling these high-stakes transactions, but the usual methods are no longer cutting it. This book provides a new way forward for businesses seeking smart M&A tactics, helping them to:
- Rethink conventional M&A wisdom in light of recent failures.
- Adopt new data-backed tactics that help ensure success.
- Avoid litigation risk and the high cost of failures.
- Examine practical models and illustrative high-profile case studies.
M&A failures have reached global epidemic proportions, with economic impacts to scale. Businesses around the world are in dire need of direction, and as the stakes grow, so do the potential costs of mistakes. The M&A Formula provides sound guidance and a practical new model for successful M&As in the new economy.
About the Authors xiii
Introduction:The Opportunity, the Pain, and the Promise 1
Why Do M&A?
WhatWill You Learn From This Book?
Who IsThis Book For?
WhyWas This BookWritten?
HowWas This BookWritten?
WhoWrote This Book?
The Professors, the Case Insights, and the
Part I THEM&AFORMULA 29
1 What Is theM&A Formula? 31
Before the M&A Formula…
Should You Build or Buy?
Understanding Business Model-Driven
Success and Failure in M&A
2 Be BusinessModel Driven (Step 1):What
Is BusinessModel-Driven M&A? 51
Business Model Complementarity and Signals for Success
Three Real Business Models: M&A Drivers and Complementarity Score
What Are the Goldman Gates?
How to Create a Target List Based on the Goldman Gates?
3 Communicative Leadership (Step 2) 69
Lesson #1 in M&A Leadership: Drive Hard with Soft Management Tools
Lesson #2 in M&A Leadership: Create a Strong Foundation for Your People
Lesson #3 in M&A Leadership: Silent People Are NOT Team Players
The M&A Deal Committee
4 Take Ownership (Step 3) 91
The M&A Playbook
Governance in Corporate Processes
CFA: Company-Specific M&A Engagement
Funding and Corporate Finance
5 Accelerating Your M&A Formula: Digitizing M&A 117
Strengthening the Formula
The M&A Dashboard
Digitizing: The Human Side of M&A
Now, Science Meets Business
Part II THEM&AFORMULA APPLIED 131
6 Case Insights (CI) and Research Insights (RI) 133
CI1: DSV: From Ten Trucks to €10bn
CI2: RB: ‘King of OTC’ Improved Value Proposition and Client Relation as Business
Model Driver in M&A
CI3: Heritage Comes First at LVMH
CI4: The Global Brewer: Driving M&A
Growth One Beer at a Time
CI5: Danaher: The Importance of Teamwork
CI6: FrieslandCampina: A Merger of Equals or an Impossible Utopia?
CI7: ASSA ABLOY: The Highest Total Return to Shareholders in Our Research Period (1st Jan 2007–1st Jan 2017)
7 Next Steps 201
M&A Reputation as a Tool for Success?
Can You Build a Good M&A Reputation
and Attract Sellers?
Things to Avoid Internally—Bias
Where to Get External Advice?
FON-A-PAL—Building Your Resource Library
What DoWe Mean WhenWe Talk About
Financial Advisors/Investment Banking
What Your Success Looks Like?
Index for Case Insights & Research Insights 227