Skip to main content

5 Habits of Highly Effective Acquirers

In a new report titled “Doing Deals in Tough Times”, KPMG has separated 160 European and US companies into two groups: M&A Champions, which achieved their projected deal synergies more than 75% of the time; and Less Successful Companies, which achieved projected synergies less than 75% of the time.

According to the report, the five attributes and practices that set the most successful deal teams apart from their competitors are:

1. Using due diligence to examine a wider range of business issues.

M&A Champions spent a third more time on non-accounting issues during due diligence than the Less Successful Companies. This is achieved through greater use of business unit personnel who bring expertise on commercial and operational issues and also through more extensive engagement with external parties such as customers, suppliers and business partners.

2. Maintaining involvement of the M&A team post-deal

The more successful deal-doers assigned responsibility to the M&A team for many post-deal activities such as monitoring achievement of targets relating to revenue synergies and cost savings. Also, these M&A teams were required to conduct a formal review of the success of the acquisition, typically within 12 months of the deal.

3. Dedicating the right people to the integration team

M&A Champions were more likely to have dedicated integration teams within their organisations. Also, those assigned to the integration were more likely to become permanent members of the management team of the target, thus ensuring continuity between the integration efforts and the on-going business

4. Effective management of cross-functional interdependencies

The more successful companies recognised the complexity of integration issues and more effectively managed the inter-dependencies between functions as opposed to those companies that took a silo approach and dealt with integration issues in isolation

5. Focus on stabilising the organisation post-close

90% of the top acquirers considered the stabilisation of the business to be one of their top 3 post-deal priorities. The early introduction of major change is identified as a key part of this stabilisation as it eliminates uncertainty and allows for focus on the job in hand

The KPMG research also examined how M&A champions organised their deal-making units to help ensure that they execute these leading practices on every transaction. The study discusses a variety of organisational characteristics, including team size, reporting structure, skill composition, recruiting practices, tools and training, and compensation – among others.

You can download the full report here

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.

Popular posts from this blog

VC Interview: Shailendra Singh of Sequoia Capital India

In a recent interview to Venture Intelligence, Shailendra Singh discussed some of the firm’s newer investments in the early stage segment including in the online payments space, the progress at a few existing portfolio companies and the active role the firm is playing in helping its portfolio companies scale and succeed in India and globally. Prior to joining the firm in 2006, Singh was a strategy consultant at Bain & Company in New York and before that, an entrepreneur in the digital media industry.

Venture Intelligence: How does Sequoia go about identifying potential early stage investments in India? Is there anything different you are doing today than, say, a couple of years back?

Shailendra Singh: There is a lot more focus on technology investing and early stage investing. In general, as you might remember a few years ago, we were doing primarily growth investing but in the past 18-odd months, we have had a very strong focus on early stage and that’s continuing. In terms of how…

PE investments in 2018 crosses $33-B to set new all-time high

Big Ticket investments in consumer apps Swiggy & Byju’s dominates year-end activity, even as investments in Core Sectors slow down
Private Equity (PE) investments in India rose to their highest ever figure of $33.1 billion in 2018 (across 720 transactions), according to data from Venture Intelligence (http://www.ventureintelligence.com), a research service focused on private company financials, transactions and their valuations. While PE investments have already surpassed the previous high - $24.3 Billion across 734 deals in 2017 - in the first nine months of 2018, the mega investments in Consumer Internet & Mobile startups such as Swiggy and Byjus towards the year-end, helped the 2018 total vault by 36% year-on-year. (Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate.) The year witnessed 81 PE investments worth $100 million or more (accounting for 77% of the total investment value during the period), compared to 47 such transac…

ChrysCapital and Sequoia Capital India grab two awards at APEX’19 PE-VC Awards

Mumbai, India, Feb 27, 2019: ChrysCapital and Sequoia Capital bagged two awards each as part of the “Awards for Private Equity Excellence” (APEX)event organized by Venture Intelligence. 

ChrysCapital bagged the Private Equity Fund Raise of 2018 Award (Closed $850 M Fund VIII within 4 months of launch) and the Private Equity Investor of 2018 Award (for its Exits from LiquidHub with 4x in dollar terms (within 4 years of its $53-M investment), AU Small Finance Bank with 11.5x return,  Torrent Pharma with 2.95x, City Union Bank with 2.83x, L&T Infotech with 2.56x)

Sequoia Capital India won the Early Stage VCInvestor(the firm registered 10x+ exits in Byjus Classes and SCIOInspire) and VC Fund Raise of 2018 (the firm closed an almost $700-M Fund VI).


Award Winners at APEX'19 PE-VC Awards

The event opened with a Fireside Chat with Kiran Reddy, CEO of SPI Group interviewed by his long time friend and colleague Vineeth Vijayraghavan.



Snapshots of the Awards Ceremony: (L-R) Gopal Srinivasan, …